Bahri Puts LNG Tanker Plan on Hold

Saudi Aramco’s shipping division Bahri has put on hold plans to charter up to 12 liquefied natural gas (LNG) tankers after Sempra Energy delayed its decision on whether to proceed with an LNG export project in Texas, two sources said.

Bahri issued an expression of interest (EOI) last year to charter the vessels from 2025 in Saudi Aramco’s first foray into LNG as part of the state oil giant’s plan to become a major global player in the gas market.

In May last year, Aramco signed a 20-year agreement to buy LNG from Sempra Energy’s planned Port Arthur export terminal and also agreed to buy a 25% equity stake in the first phase of the multi-billion dollar project.

However, Sempra said this month it was delaying its decision about whether to proceed with the project until 2021 following the slump in global demand for energy because of the coronavirus pandemic.

“The shipping requirement was meant for Port Arthur, so given the delay and also the current market, it makes sense to put the shipping on hold,” one of the sources said.

Aramco declined to comment.

The Saudi state-owned company has been developing its own gas resources as well as eyeing assets in the United States, Russia, Australia and Africa, the company’s chief executive officer and the Saudi energy minister have said.

The slump in LNG prices to record lows since the coronavirus struck may make financing more difficult and Aramco might be more cautious about its gas investments in the future, one industry source said.

(Reporting by Jessica Jaganathan; Additional reporting by Dahlia Nehme; Editing by David Clarke)