NO. 1: Saudi Arabian Oil Co., aka Aramco, has signed a tentative agreement to purchase 1.2 million metric tons/year (mmty) of LNG from NextDecade Corp.’s Rio Grande export project in South Texas.
Aramco, which has been working to expand its liquefied natural gas portfolio, would purchase the super-chilled fuel from Train 4 at Rio Grande over 20 years at prices tied to Henry Hub. NextDecade sanctioned the first 17.6 mmty phase of Rio Grande last year. It expects to sanction the 5 mmty Train 4 by the end of the year.
Venture Global LNG Inc. also agreed to provide a subsidiary of Ukrainian power producer DTEK with more than 2 mmty. Under a heads of agreement with D.Trading, Venture Global said it would supply LNG later this year through the end of 2026 from its Plaquemines terminal that is currently under construction. It would also supply 2 mmty for 20 years from the CP2 terminal being developed in Louisiana.
Ukraine does not have any LNG import terminals and would need to tap regasification capacity elsewhere in the region. The DTEK and Aramco deals are being negotiated and must still be finalized.
NO. 2: The U.S. Treasury Department has imposed more sanctions on Russian LNG projects. The United States said it would sanction companies involved in the 5 mmty Obsky LNG project, as well as the Arctic LNG 1 and Arctic LNG 2 projects, which would each produce 19.8 mmty.
The United States sanctioned Arctic LNG 2 last year. The first train started up in December, but the sanctions have significantly hampered operations. Western sanctions against ice-class vessels to move LNG from Russia’s Far North have also hurt expansion plans on the Yamal and Gydan peninsulas, where the projects are located.
The Treasury Department said the latest round of sanctions were aimed at limiting Russia’s future energy revenue as it continues with its war against Ukraine. The Kremlin is aiming to triple LNG output by 2030.
NO. 3: Uniper SE said this week it has terminated long-term supply contracts with Russia’s state-owned Gazprom PJSC.
The contracts have been at the center of Germany and Russia’s energy ties since the 1970s. However, Uniper won $14 billion in arbitration this month for supplies that were cut off by Gazprom in 2022 after Russia invaded Ukraine.
Uniper, one of Europe’s largest gas buyers, was forced to replace those supplies with higher priced volumes on the spot market, which created deep losses and led to its nationalization.
If the payments to Gazprom were enforced, other companies like Austria's OMV AG, which still gets about 80% of its gas from Russia, have warned that supplies could be disrupted.
