Experts expect US LNG capacity to double in the next four years. Credits: Skorzewiak/Shutterstock.

Gulf oil giants Saudi Aramco and ADNOC are considering investing in US LNG projects in a move showcasing growing competition in the chilled gas market.

According to several sources consulted by Reuters, Saudi Aramco is in talks to invest in the expansion of Sempra’s Port Arthur LNG project in Texas. One source said Aramco is in talks to partially or entirely acquire all volumes from one of the two liquefaction units at Port Arthur.

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News of the latest investment talks in the US comes after Vietnam’s government called for investment from the Saudi oil giant in its petrochemical and oil refinery projects last October. Aramco entered the LNG market in September 2023 after it agreed to buy a minority stake in MidOcean Energy, valued at $500m.

At the same time, ADNOC is looking to take over NextDecade’s fourth processing unit at its $18bn Rio Grande LNG export facility. NextDecade is an LNG development company headquartered in Houston, Texas.

In the first half of 2023, the US was the largest exporter of LNG in the world, according to data from the international gas association Cedigaz and cited by the US Energy Information Administration. US LNG exports averaged 11.6 billion cubic feet per day (bcfd) between January and June 2023, outstripping Australia (10.6bcfd) and Qatar (10.4bcfd).

“The US LNG market is an attractive proposition for giants ARAMCO and ADNOC, being the largest export market and facing uncertainty about the financing of LNG projects,” said GLobalData Upstream Analyst Paul Hasselbrinck. “Their venturing in LNG was long due, with ARAMCO only recently acquiring a minority stake in MidOcean, and ADNOC owning a capacity below 10% that of world leader QatarEnergy. The Qatari company, has already set foot in the US market, with 70% ownership of Golden Pass Export, a plant that is set to produce three times more LNG than ADNOC’s total capacity”