Saudi Aramco, the Middle East’s largest oil company, has signed a major deal with NextDecade Corporation. The 20-year agreement allows Aramco to buy 1.2 million tonnes of liquefied natural gas each year from a Texas facility. This move helps Aramco expand beyond oil and into the growing LNG market. The flexible contract structure benefits both companies and strengthens energy trade between the U.S. and Saudi Arabia. What might this partnership mean for global energy markets?
Saudi Aramco, the giant oil company from Saudi Arabia, has taken a major step into America’s natural gas market. The company has signed a 20-year agreement with NextDecade Corporation to buy 1.2 million tonnes of liquefied natural gas (LNG) each year. This deal follows an earlier agreement made in June 2024 and marks Aramco’s significant entry into the LNG sector.
Saudi Arabia’s oil giant makes historic move into U.S. natural gas with 20-year NextDecade LNG deal.
The LNG will come from Train 4 of NextDecade’s Rio Grande facility in Texas. The agreement uses a free-on-board structure, which means Aramco takes ownership of the gas once it’s loaded onto ships. This arrangement gives the Saudi company more flexibility in where it can sell the gas.
This deal is part of Aramco’s strategy to expand beyond oil and grow its global LNG presence. It helps the company diversify its energy resources and meet growing demand for cleaner energy sources. The agreement also strengthens energy trade relations between the U.S. and Saudi Arabia.
The Rio Grande LNG facility is a major project with substantial capacity. Its first phase can produce 17.6 million tonnes of LNG yearly. Train 4, which will supply Aramco, is expected to cost between $6 billion and $6.2 billion to develop. The full project could eventually increase capacity to 27 million tonnes annually.
For NextDecade, this long-term contract guarantees steady revenue for years to come. However, the project’s expansion depends on securing a positive final investment decision based on commercial and financial factors. Aramco is positioning itself as a leading global LNG player through strategic partnerships that enhance its gas portfolio. The company previously announced its entry into the LNG business with a $500 million stake in MidOcean Energy in September 2023.
Aramco isn’t stopping with this deal. The company is also considering investments in other U.S. LNG projects, including Port Arthur LNG, where it may purchase 5 million metric tons annually from Phase 2 of that project.
This agreement highlights the growing importance of U.S. LNG exports in global energy trade. This expansion of LNG exports is reshaping global energy markets and reducing certain countries’ influence over regional energy customers. It improves energy security for key markets and shows confidence in the LNG market’s long-term stability. The deal also supports the shift to lower-carbon energy sources while strengthening America’s position as a leading LNG exporter.
