Middle East oil giant Saudi Aramco has put a hold on its planned move into LNG shipping and a tender for up to 12 newbuildings.

Quoting two unnamed sources, Reuters reported that Aramco’s shipping division Bahri has paused its ongoing business for the raft of LNG newbuildings after Sempra Energy said it would delay a planned investment decision on its Port Arthur LNG project in Texas until 2021 citing "the current market environment".

Aramco had signed up Sempra Energy to buy 5 million tonnes per annum and take a 25% equity stake in the US liquefaction developer’s 11-mtpa Port Arthur LNG project on the US Gulf coast. The liquefaction project was due to be sanctioned in the third quarter of this year.

The Covid-19 pandemic has heightened already weak trading conditions for LNG as energy demand has fallen. There are currently surplus volumes of LNG in the market, storage facilities are full and gas prices at all time lows, leaving many liquefaction project developers rethinking and scheduling their planned investments.

TradeWinds first reported on Bahri’s enquiry on the 12 LNG newbuildings in December.

Bahri officials visited shipyards at the start of this year when it became clear that the company was interested in discussing a wider package of newbuildings including VLCC and VLGC tonnage.

The company had also pre-qualified shipowners for the LNG newbuildings and had been planning to shortlist its preferred candidates by June.

But by March shipyard sources said the business appeared to have gone quiet and with the ships not needed until 2025, several thought it might prove slow moving.

Saudi Aramco, which stocklisted in December, has been moving to diversify its interests from oil into gas and renewables. The company has already tried its hand on LNG trading a cargo to India.