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Adnoc has signed a 15-year agreement with ENN LNG, the Singapore subsidiary of China’s ENN Natural Gas, for the delivery of at least a million metric tonnes a year of liquefied natural gas.
The LNG will primarily be sourced from Adnoc’s Ruwais LNG project in Abu Dhabi, with deliveries expected to start in 2028 after the start of the plant’s commercial operations, the state-run energy company said on Wednesday.
“This landmark LNG agreement … enhances Adnoc’s position as a reliable and responsible global energy provider,” said Rashid Al Mazrouei, Adnoc’s senior vice president of marketing.
It creates “new opportunities for value-creation across our gas value chain as natural gas demand continues to increase”, he added.
The Ruwais plant will be the first LNG project in the Mena region to run on clean power, making it “one of the lowest carbon-intensity LNG facilities in the world”, according to Adnoc.
The project consists of two natural gas liquefaction trains with a total capacity of 9.6 million metric tonnes per annum.
When completed, it will more than double Adnoc’s LNG production capacity amid growing global demand for natural gas.
The agreement with ENN is contingent upon a final investment decision (FID) on the project, including regulatory approvals and the negotiation of a definitive sale and purchase agreement between the two companies, Adnoc said on Tuesday.
China, the world’s second-largest economy and one of the biggest energy importers, has signed several long-term LNG contracts since last year to fuel its post-pandemic recovery.
Last month, QatarEnergy signed a partnership agreement with China Petrochemical Corporation (Sinopec) for the North Field South expansion project.
The companies also signed a long-term sales and purchase agreement for the delivery of three million tonnes of LNG annually from the NFS project to Sinopec’s China-based terminals for 27 years.
In September, Adnoc Gas, estimated to have the seventh-largest gas reserves globally, signed an agreement to supply LNG worth $450 million to $550 million to a subsidiary of state-owned energy business PetroChina.
European LNG demand soared to a record high last year after Russia slashed exports to the region following its invasion of Ukraine.
That resulted in record gas prices worldwide and forced developing economies such as India and China to substitute gas with coal for electricity generation.
Global natural gas demand is set to slow in the coming years amid declining consumption in mature markets due to an “accelerated” adoption of renewables and improved energy efficiency, according to the International Energy Agency.
Demand is projected to grow by 1.6 per cent a year between 2022 and 2026, down from an average of 2.5 per cent a year between 2017 and 2021, the agency said in its Gas 2023 Medium-Term Market Report in October.
