Middle Eastern oil powerhouses, supported by robust government backing and multi-billion-dollar capital, are aggressively expanding their presence in the global liquefied natural gas (LNG) sector, aiming to nearly double their LNG capacity within the next decade. Leading companies such as Saudi Aramco, Abu Dhabi National Oil Company (ADNOC), and QatarEnergy are making substantial investments in LNG production and trading. This push is driven by the rising demand for natural gas as a key transition fuel and the desire to diversify beyond traditional crude oil assets.
“Ongoing strong margins in LNG trading make it the most attractive hydrocarbon commodity,” said Ogan Kose, managing director at consulting firm Accenture, speaking to Bloomberg. He noted that profits from LNG investing and trading are “almost unheard of in any other hydrocarbon commodity.”
While natural gas has historically played a secondary role to oil in global energy markets, LNG is experiencing rapid growth thanks to its crucial role as a bridge fuel in the shift toward renewable energy. Despite this growth, many LNG projects worldwide face delays and cost overruns, requiring additional capital to reach completion. This situation provides an opportunity for financially strong Gulf countries to leverage their energy resources, financial strength, and geopolitical influence to expand in the LNG arena.
In addition to production, Middle Eastern nations view LNG trading as a lucrative avenue to bolster their commodity trading operations and challenge European energy giants like Shell and BP. Countries including Saudi Arabia, Qatar, Bahrain, Kuwait, and Oman are actively expanding their LNG trading capabilities. Oil and gas trading has become an important revenue stream for these firms, especially amid the volatility of global commodity markets.
Recent deals underscore this expansion. Just days ago, ADNOC’s investment arm, XRG PJSC, launched an $18.7 billion bid for Australian fossil fuel producer Santos Ltd.—offering a nearly 30% premium to the company’s recent closing price. This move is part of ADNOC’s strategy to grow its LNG portfolio. Santos has ambitious plans to increase LNG production by 50% by 2030. While this long-term growth focus has frustrated some investors seeking quicker returns, it attracted XRG, which is pursuing high-growth opportunities. XRG has been actively acquiring assets in gas and chemicals, targeting an $80 billion enterprise valuation.
QatarEnergy recently boosted its LNG output through the Golden Pass LNG project in Sabine Pass, Texas. The joint venture, with QatarEnergy holding a 70% stake and ExxonMobil 30%, doubled QatarEnergy’s North gas field expansion capacity from 77 million metric tons per annum (MMtpa) to 160 MMtpa. Golden Pass LNG is authorized to export up to 937 billion cubic feet of natural gas annually to both Free Trade Agreement (FTA) and non-FTA countries over the next 25 years. The project received Federal Energy Regulatory Commission (FERC) approval to commence operations in April.
Saudi Aramco entered the LNG sector two years ago with a strategic minority stake acquisition in Australia’s MidOcean Energy for $500 million. Last year, Aramco increased its stake to 49% and agreed to finance MidOcean’s purchase of a 15% interest in Peru LNG from Hunt Oil Company. MidOcean Energy is executing a growth plan aimed at building a diversified global LNG portfolio, with ongoing acquisitions in four Australian LNG projects.
Kuwait Petroleum is also in advanced talks with Australia’s Woodside Energy Group to acquire a stake in Woodside’s proposed LNG project in Louisiana, USA. Woodside, Australia’s largest gas producer, recently agreed to sell a 40% stake in the 27.6 million metric tons per year Louisiana LNG facility to Stonepeak for $5.7 billion. Woodside acquired U.S.-based Tellurian for $1.2 billion in 2024 and aims to develop the Louisiana LNG project to meet rising gas demand. The first phase of this extensive project is estimated to cost approximately $16 billion.
The LNG expansion trend is not confined to the Middle East. Southeast Asian companies, including Malaysia’s state-owned oil and gas firm Petroliam Nasional Bhd., are also seeking to increase LNG production beyond their domestic markets. Industry experts agree that this rapid growth in LNG supply will benefit buyers through increased competition and greater diversification of energy sources worldwide.
