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June 1, 2020

Bahri withholds LNG vessels charter plan

By MEED   

It follows investment decision delay for the US LNG terminal, from which Saudi Aramco was to purchase five million t/y of LNG

Saudi Arabia’s national shipping company Bahri has postponed plans to charter a dozen vessels to transport liquefied natural gas (LNG) from the US.

The move comes after US-based Sempra LNG postponed the final investment decision (FID) on its planned LNG terminal project in Port Arthur, Texas, in early May.

The proposed Port Arthur LNG Phase 1 project was expected to include two liquefaction trains up to three storage tanks and associated infrastructure to facilitate the export of approximately 11 million tonnes a year (t/y) of LNG on a long-term basis.

Saudi Aramco eventually bought a 25% equity stake in the Port Arthur LNG project.

In May last year, Aramco also entered a 20-year heads of agreement with Sempra LNG’s parent company Sempra Energy to purchase up to five million t/y of LNG from the Port Arthur phase 1 project upon commissioning of the facility in 2025.

Following the LNG purchase agreement between Aramco and Sempra, Bahri issued an expression of interest (EOI) last year to charter the vessels from 2025.

However, with Sempra opting to push back the final investment decision on the Port Arthur project until 2021, amid weak international gas and LNG pricing and challenges in securing sufficient commercial agreements for producers, Bahri has decided to halt its LNG vessels charter plan.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here

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