ADNOC Gas signs multi-million dollar LNG supply deal with Japex

UAE’s ADNOC Gas has signed a five-year liquefied natural gas (LNG) supply agreement with Japan Petroleum Exploration Company (Japex).

The deal, which is valued between $450m (Dhs1.65bn) and $550m (Dhs2bn), builds on the bilateral relationship between the UAE and Japan, ADNOC Gas said in a bourse filing. It follows Japanese Prime Minister Fumio Kishida’s visit to the UAE and other GCC states in July, which focused on securing energy supplies for Japan.

“Japan is one of the UAE’s largest and most important energy partners and we are very pleased to strengthen this relationship through this LNG supply agreement with Japex,” said Ahmed Alebri, CEO of ADNOC Gas.

“The agreement reinforces ADNOC Gas’ position as a global LNG export partner of choice and highlights the company’s growing global presence, particularly in the Asian LNG market.”

ADNOC’s commitment to sustainable international LNG supply is further evidenced through its planned world-class low-carbon LNG growth project which will be constructed in Al Ruwais Industrial City, Al Dhafrah, Abu Dhabi.

ADNOC Gas’ LNG deals

ADNOC Gas intends to more than double its LNG production capacity to meet increased global demand for natural gas. The company’s agreement with Japex follows LNG supply agreements with TotalEnergies Gas and Power and India Oil Corporation (IOCL).

The Abu Dhabi-listed firm signed a 14-year supply agreement with IOCL for the export of up to 1.2 million metric tonnes per annum of LNG per year in July.

It also signed a three-year agreement with TotalEnergies in May for the export of LNG from 2023 to 2025, cementing the company’s position as a reliable global supplier of natural gas. ADNOC Gas also delivered the first-ever LNG cargo to be shipped to Germany from the Middle East in February.

Expansion strategy

Meanwhile, ADNOC Gas continues to capitalise on the growing global demand for natural gas, as the company continues to grow its export business, ensuring a sustainable and economic supply of natural gas to meet local and international demand.

The company awarded $1.34bn in contracts to Petrofac Emirates and a consortium led by the National Petroleum Construction Company and C.A.T International for the expansion of its natural gas pipeline network in July.

Earlier, ADNOC Gas invested $3.6bn to boost its gas processing capabilities as the company looks to expand its production capacity in the UAE. The investment is aimed at providing sufficient energy to the country’s growing industrial sector while stimulating economic growth and diversification through the In-Country Value generated by the contract.

The company’s half-year income plunged by 12 per cent year-on-year to $2.3bn from $2.6bn a year ago due to lower pricing. Revenues in the six months to June 30 also dropped by 20 per cent to $10.6bn, compared to pro forma adjusted revenue of $13.3bn for H1 2022, impacted by the pricing environment.

Read: ADNOC Gas’ H1 2023 net income plunges to $2.3bn