Energy giant Saudi Aramco and shipowner Bahri have made a first approach to shipowners for a series of up to 12 LNG carriers as Saudi Arabia moves to extend its toehold in the sector.

If the deal ends up involving newbuildings, it could be worth $2.3bn.

Shipping sources told TradeWinds that Saudi Aramco, working with Bahri, is kicking off a process to secure 174,000-cbm vessels, with deliveries in 2025 and 2026.

The ships are required to transport five million tonnes per annum of LNG, which Saudi Aramco signed up to buy from phase 1 of Sempra Energy’s Port Arthur LNG export project in the US during May.

Saudi Aramco and Sempra signed a heads of agreement (HOA) for a 20-year LNG sale-and-purchase agreement (SPA). The Saudi company also expects to take a 25% stake in this project.

Shipowners are due to respond with their initial expressions of interest by the start of next week. After a period of clarification, the Saudi companies will decide by the end of February which outfits will receive a full request for proposals (RFP).

The formal RFP will be issued in March and shortlisted shipowners selected by June.

Early start

Shipbroker and consultant Poten & Partners is understood to be handling the shipping process for Saudi Aramco and Bahri.

Those following the business said the Saudi players are starting their ship hunt early, particularly if the vessels are not required until 2025.

But they insisted the planned delivery of the ships that Saudi Aramco requires would coincide with the schedule outlined by Qatar for its planned 80-vessel LNG newbuilding project.

The Qatari exercise envisages 40 firm vessels being delivered between 2023 and 2026, suggesting the companies might be trying to gain first-mover advantage.

Sources said Saudi Aramco may also be looking to gain early experience in the LNG sector by trading volumes in advance of its Sempra cargoes coming onstream.

The Saudi company, which is also pursuing a $1.7trn initial public offering and which owns a minority stake in Bahri, has already sold its first traded cargo to India and has spoken about supplying LNG to Bangladesh.

Saudi Arabia, the world’s largest oil producer, has been signalling its intention to enter the LNG arena for several years, but 2019 was the first time the country took a buying position.

At the signing of the HOA with Sempra, Saudi Aramco president and chief executive Amin Nasser said: “The agreement with Sempra LNG is a major step forward in Saudi Aramco’s long-term strategy to become a leading global LNG player.

“With global demand for LNG expected to grow by around 4% per year, and likely to exceed 500 million metric tons a year by 2035, we see significant opportunities in this market and we will continue to pursue strategic partnerships which enable us to meet rising global demand for LNG.”

Port Arthur LNG’s phase 1 will comprise two liquefaction trains capable of producing around 11 mtpa. Sempra has said it has the potential expansion capabilities of up to eight liquefaction trains, or about 45 mtpa of capacity.