Abu Dhabi based ADNOC Gas has agreed to supply LNG with various global giants.

Adnoc Gas, which has access to 95% of the UAE’s natural gas reserves, is looking to boost exports of products such as LNG, liquefied petroleum gas and naphtha. Adnoc Gas has been boosting investments to expand its geographical and operational reach. The company supplies approximately 60% of the UAE’s sales gas needs and supplies end-customers in more than 20 countries.

In February, Adnoc signed a sales and purchase agreement with Japan’s Osaka Gas for the supply of up to 800,000 tons per annum of LNG from its Ruwais LNG project in Abu Dhabi, marking the first long-term LNG sales agreement between Adnoc and the Japanese utility.

Adnoc Gas is a key player in its parent Adnoc’s strategy to enhance its natural gas production capacity and expand global LNG exports. In April last year, Adnoc Gas said it plans to invest more than $13 billion until 2029 to pursue domestic and international growth opportunities as it aims to expand its LNG production capacity.

The company aims to more than double its LNG output capacity by 2028 through the strategic acquisition of the new Ruwais LNG plant from parent company Adnoc and potentially target assets in Europe, India, China and South-East Asia, it said at the time. In May this year, Adnoc Gas reported a 7% year-on-year increase in net income to $1.27 billion, driven by strong domestic demand for gas and continued economic growth in the UAE. The company is expected to announce its second-quarter financial results on Wednesday.

Recently, Adnoc has signed a new liquefied natural gas supply agreements with Chinese companies amid strengthening of economic ties between the UAE and the world’s second-largest economy. As part of the 15 years contract with a unit of ENN Natural Gas, Adnoc will supply up to one million tons of liquefied natural gas annually to the Chinese private company.

This is the largest LNG supply agreement to be signed between the UAE and a Chinese partner and was completed during the visit of Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, and managing director and group chief executive of Adnoc, to China last week. Simultaneously, Adnoc has also announced LNG supply deals with two other Chinese companies – CNOOC Gas and Power Group and ZhenHua Oil during the visit. The new announcements come as the UAE, the Arab world’s second-largest economy, and China continue to strengthen economic ties.

Last week, Adnoc opened a sales and marketing office in Beijing to boost long-term business relationships between the energy company and China. The opening of this office and the signing of the LNG supply agreements are important steps that will contribute in strengthening co-operation with their Chinese partners. This would also create new opportunities to maximise benefits across various aspects and areas of the energy sector value chain.

Last year, Adnoc also signed strategic agreements with two Chinese energy companies to collaborate on low-carbon energy solutions. The pact with China National Offshore Oil Company aims to explore opportunities in new energy plans, low-carbon solutions, LNG ventures, oil and gas activities, and trading projects.

Meanwhile, an agreement with China National Petroleum Corporation will focus on the energy value chain, including low-carbon solutions, LNG, oil and gas exploration, advanced technologies, refining, marketing and trading. The new agreements come as China looks to diversify its LNG imports. Australia, Qatar and Russia, as well as Malaysia and the US, were the biggest suppliers of LNG to China last year, according to a recent sources report. As per industries expert the consumption of the fuel – considered a cleaner alternative to coal and crude oil – is expected to reach 630 million tons to 718 million tons a year by 2040, compared with 407 million tons last year.

One of the India’s largest companies, Hindustan Petroleum Corporation (HPCL) has signed a 10 years contract with Adnoc for importing 5,00,000 metric tonnes of liquefied natural gas (LNG) per annum, as demand for low-carbon fuel remains strong amid decarbonisation efforts (The details of this contract has not been disclosed).

The gas will be supplied from Adnoc Gas’ Das Island liquefaction facility, which has a production capacity of 6 mmtpa, the company said, adding that the Das Island LNG plant has shipped more than 3,500 LNG cargoes globally since starting operations.

“This milestone underscores Adnoc Gas’s ability to reliably meet rising global demand for LNG and support India’s ambition to increase natural gas to 15% of its primary energy mix by 2030”, said Fatema Al Nuaimi, chief executive of Adnoc Gas. The long-term agreement with HPCL is Adnoc Gas’s third with Indian companies in the past year, reflects the “robust energy partnership” between the UAE and India, she added.

India is aiming to have natural gas make up a 15% share of its total energy mix by 2030. The latest agreement with HPCL builds on Adnoc’s strategy to build its customer base after a series of LNG agreements in the past two years.

In February, Adnoc Gas signed a 14 years deal to supply up to 1.2 million tons per annum of LNG to Indian Oil. The agreement is valued between $7 billion and $9 billion, Adnoc Gas said at the time, adding that Indian Oil is set to become the largest buyer of LNG from Adnoc by 2029. The Abu Dhabi based Adnoc Gas signed another contract with Indian Oil in September last year, in which it signed a preliminary 15 years agreement with the company to supply 1 million tons a year of LNG to India.

Adnoc also signed a 10 years agreement to supply LNG to state-owned energy corporation Gail India in January last year, without disclosing the total value of that agreement. Earlier, in June 2023, Adnoc Distribution, signed an agreement with Hindustan Petroleum to explore opportunities for expanding their lubricants and allied products businesses in the UAE, India and other markets.

Team Maverick