ADNOC Gas agrees $7-9bn 14-year LNG deal with India

UAE’s ADNOC Gas has signed a 14-year supply agreement with Indian Oil Corporation (IOC) for the export of up to 1.2 million metric tonnes per annum (mmtpa) of liquefied natural gas (LNG) per year.

The deal, which is valued in the range of $7bn to $9bn (Dhs25.7 to Dhs33bn) over its 14-year term, marks another significant milestone for ADNOC Gas as it expands its global reach and reinforces its position as one of the biggest players in the global LNG market.

Under the terms of the agreement, ADNOC Gas will deliver up to 1.2 mmtpa of LNG to IOCL in India. The deal serves as a testament to ADNOC Gas’ ability to meet the growing global demand for LNG, a critical fuel in the energy transition.

“We are pleased to announce this long-term LNG sale, further strengthening the long-standing partnership with IOCL,” said Ahmed Alebri, CEO of ADNOC Gas.

“We look forward to expanding our collaboration and take pride in the knowledge that ADNOC Gas’ LNG exports will further support the development of IOC and contribute to India’s growth story.”

ADNOC Gas has a production capacity of 10 billion cubic feet a day across eight onshore and offshore sites. The company was created following the merger of ADNOC’s gas processing and LNG operations in November 2022.

The company continues to capitalise on growing global demand for natural gas, as it continues to grow its export business. It delivered the first-ever LNG cargo to be shipped to Germany from the Middle East in February.

ADNOC Gas signed a three-year agreement with TotalEnergies in May for the export of LNG from 2023 to 2025, cementing its position as a reliable global supplier of natural gas.

The Abu Dhabi-based firm has made significant progress on its five-year $14bn strategic and growth project portfolio, encompassing a range of projects integral to elevating the efficiency of operations and production output.

UAE-India trade treaty

Meanwhile, the landmark LNG deal was signed during Prime Minister Narendra Modi’s official visit to the UAE last week and allows IOC to import LNG without paying a 2.5 per cent import tax under India’s trade treaty with the UAE.

During Prime Minister Modi’s visit, the UAE signed three MoUs with India aimed at catalysing further collaboration and partnerships between the two countries. Key among the MoUs exchanged is the agreed to set up a real-time payment link to facilitate easier cross-border money transfers.

The two countries seek to continue the momentum of their growing trade ties following the signing last year of their Comprehensive Economic Partnership Agreement (CEPA). “Since the implementation of the CEPA between the UAE and India, we have witnessed real momentum in bilateral non-oil trade, which is keeping us on course to reach our target of $100bn by 2030,” said Dr Thani bin Ahmed Al Zeyoudi, UAE’s Minister of State for Foreign Trade.

The latest figures from the UAE Ministry of Economy indicate that from May 2022 to April 2023, the first 12 months of the CEPA, bilateral non-oil trade reached $50.5bn, a 5.8 per cent increase on the same period from the previous year.

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