India has closed a 10-year liquefied natural gas supply deal with ADNOC. The value of the deal is $3 billion, making it one of the largest for the energy importer.
Under the deal, Reuters reports, ADNOC will ship 500,000 tons of liquefied gas to India’s Hindustan Petroleum Corp.
“India is now the UAE’s largest customer and a very important part of ADNOC Gas’ LNG strategy,” the Emirati company said in a statement. The LNG deal is part of a broader investment agreement between India and the UAE that is expected to be worth some $200 billion. Last year, Adnoc also closed a long-term LNG supply deal with Indian Oil Corp. for 1.2 million tons annually. The deal, for a period of 15 years, was estimated to be worth between $7 billion and $9 billion.
The UAE has been looking to boost its LNG production and export capacity, betting on its flagship Ruwais LNG project in Abu Dhabi. Ruwais LNG will be the first LNG export facility in the Middle Eastern and North African region to run on clean power, the UAE says.
The project, which will consist of two liquefaction trains with a capacity of 4.8 million tons annually each, will more than double ADNOC’s existing domestic LNG production capacity to around 15 million tons per year.
Ruwais LNG has already signed major long-term offtake deals, including with Germany and Shell, to which it will now add the Hindustan Petroleum Corp. deal. Commercial operations at the plant are on track to commence by the end of 2028, Abu Dhabi’s national oil company said last year.
India is a major importer of liquefied natural gas, but, as with crude oil, it is price sensitive, which has motivated Indian energy suppliers to go on the hunt for long-term supply deals with more predictable prices.
By Irina Slav for Oilprice.com
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