Abu Dhabi builds $615 million stake in Cheniere LNG
Oil-rich emirate takes stake of 5% in US liquefaction giant
Gas-poor Abu Dhabi has built a stake of just over 5% in the liquefaction giant Cheniere Energy, becoming the fourth-largest shareholder in the leading US exporter of liquefied natural gas.
The Persian Gulf emirate’s sovereign fund, Abu Dhabi Investment Authority (Adia), disclosed its holding in a filing with the US Securities & Exchange Commission, giving it an interest in Cheniere valued at $615 million.
Adia, which manages about $600 billion in assets worldwide, invests on behalf of the Government of Abu Dhabi, the richest emirate in the United Arab Emirates, a lose federation of six states run by different royal families.
Cheniere, the largest US LNG producer, owns the Sabine Pass liquefaction facility in Louisiana as well as the Corpus Christi LNG terminal in Texas.
Political dimension
Adia’s decision is bound to please US President Donald Trump who views gas exports as enhancing US influence on the global energy scene while bringing economic gains.
The US, which started exporting shale gas in 2016, has fast become a top LNG exporter in the world. Exports are set to rise further as more US facilities come on stream in coming years.
Abu Dhabi, boasting the fourth largest crude oil reserves in the Persian Gulf, has scarce gas reserves of its own and is currently importing large supplies from Qatar to meet domestic needs.
Adia's investment in Cheniere gives Abu Dhabi easier access to US supplies, if need be, at a time of frosty relations with Qatar, which is under an Arab trade boycott, led by Saudi Arabia and the UAE.
Saudi tie-ups
Saudi Arabia is also seeking investment in US liquefaction facilities.
Saudi Aramco and Sempra Energy signed an Interim Project Participation Agreement (IPPA) in January for the Port Arthur LNG export project which is under development in Jefferson County, Texas.
Saudi Aramco's President Amin Nasser said at the time: "The global demand growth for LNG is expected to continue in the coming years, and we see significant opportunities in this market.
This agreement with Sempra Energy is another step forward for Saudi Aramco's long-term gas strategy, and towards becoming the global leading integrated energy and chemicals company."
Like the UAE, Saudi Arabia is short of domestic gas supplies and is having to resort to crude oil to keep its power sector functioning.
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