ADNOC reaches long-term gas supply deal with Germany

UAE's national oil company ADNOC has reached an agreement with Germany to supply one million tonnes of liquefied natural gas annually for a period of 15 years. The deal will be implemented through Singapore-based SEVI Trade and Marketing Company Limited, a subsidiary of the German energy insurance company for Europe, CEVI. 

Last January, the company already signed a similar ten-year agreement to supply half a million tonnes of gas per year to GAIL Limited, India's largest natural gas company. 

As ADNOC announced in a statement, deliveries are expected to start in 2028.

With Germany, Abu Dhabi continues to strengthen its plans to sell liquefied natural gas through long-term contracts in an effort to compete with Qatar, the Middle East's largest producer.   

Emirates has increased its investment in gas as a transition fuel as the world seeks to reduce greenhouse gas emissions and Europe seeks to secure new partners in the sector in the wake of Russia's invasion of Ukraine in February 2022.  

ADNOC's plan aims to link the components of a value chain to this sector in the UAE to secure natural gas supplies and meet growing demand in local and global markets. 

As such, the Ruwais complex in Abu Dhabi is expected to double liquefied natural gas production to approximately 15 million tonnes per year. Currently production is around six million tonnes.   

"Gas covers almost a quarter of Germany's primary energy use and we look forward to supporting its efforts to improve energy security and diversify its sources," said Fatima Al Nuaimi, executive vice president of ADNOC's Gas Processing, Refining and Petrochemicals Business Department, following the agreement with Berlin.  

"The pact to supply gas from the Ruwais low-emission project, which is the first of its kind with a European company, strengthens ADNOC's position as a reliable and responsible global energy supplier," she added.  

A final decision on the Ruwais investment is expected later this year, although the project has already started preliminary work. This month, ADNOC announced that a joint consortium led by Technip Energies and including GGC Corporation and National Petroleum Construction will carry out initial engineering and construction work.

Using electricity from sustainable sources, it will be one of the lowest carbon-intensive gas-fired facilities in the world, contributing to ADNOC's ambitious goal of achieving climate neutrality by 2045.  

Once completed, the project will consist of two natural gas liquefaction lines, each with a production capacity of 4.8 million tonnes per year and a total capacity of 9.6 million tonnes per year. 

However, ADNOC is not the only regional company increasingly focusing on gas, as Saudi oil giant Aramco is also looking for space in the sector.   

Qatar, which represents the largest gas market in the region, also recently announced a further expansion of the North Field project, a move that will strengthen its position as one of the world's largest gas exporters. 

ADNOC Gas, established at the end of 2022, officially started operations in early 2023 in order to reap the benefits of the gas projects, as the country has the seventh largest reserves in the world.  

ADNOC Gas' production capacity is approximately 10 billion standard cubic feet of gas per day, so the company can offer its services to a large group of local and international customers through a broad product portfolio.

The Emirati state-owned company covers about 60% of the local market needs and also exports natural gas and other products to a group of customers in more than twenty countries