Shell Commits to Long-Term Purchase from Ruwais LNG

Abu Dhabi National Oil Co PJSC (ADNOC) said Tuesday it has signed a 15-year deal with Shell PLC to supply the British company up to one million metric tons per annum (MMtpa) of liquefied natural gas (LNG) from the Ruwais LNG project in the United Arab Emirates.

“Signed during ADIPEC, the deal marks ADNOC’s first long-term LNG sales agreement with Shell and the eighth long-term offtake agreement secured for the Ruwais LNG project”, ADNOC said in a press release.

“This SPA [sale and purchase agreement] converts a previous heads of agreement into a definitive agreement and marks a significant step in ADNOC’s efforts to rapidly commercialize the Ruwais LNG project.

“With this latest agreement, more than eight MMtpa of the project’s planned 9.6 MMtpa capacity is now secured through long-term deals with customers across Asia and Europe, just 16 months after the project’s final investment decision in July 2024”.

Fatema Al Nuaimi, chief executive of ADNOC gas processing and sales arm ADNOC Gas PLC, said, “While the industry can take up to four or five years to market such volumes, Ruwais is advancing at record pace”.

“In parallel, construction, contractor mobilization and site works are all on track for commissioning by the end of 2028”, Al Nuaimi added.

The export plant in Al Ruwais Industrial City is planned to have two trains, each with a production capacity of 4.8 MMtpa. Targeted to be put into production 2028, the facility would more than double ADNOC’s LNG capacity.

Shell already holds a 10 percent stake in the project through Shell Overseas Holdings Ltd, ADNOC confirmed Tuesday.

Last year ADNOC penned separate agreements farming out a total of 40 percent in Ruwais LNG to Shell, BP PLC, Mitsui & Co Ltd and TotalEnergies SE.

Japan’s Mitsui also penned an offtake of 600,000 metric tons a year, ADNOC said then.

On June 12, 2024, ADNOC announced the final investment decision and the award of a $5.5 billion engineering, procurement and construction contract to a joint venture between Technip Energies NV, JGC Holdings Corp and NMDC Energy.

Ruwais LNG would be the first LNG export facility in the Middle East and North Africa region to run on clean power, according to ADNOC. In 2023 it awarded a contract for all-electric compression systems for the project to Baker Hughes Co. Ruwais LNG’s two trains will use the United States firm’s 75-megawatt BRUSH electric motor technology, Baker Hughes said in a press release October 4, 2023.

Shell LNG Expansion

In its latest LNG outlook, published February 25, Shell said that thanks to Asia, global LNG demand could reach 630-718 MMtpa by 2040, a higher forecast compared to 2024.

China’s push to bring piped gas to more people and India’s gas infrastructure buildout would drive demand in Asia, Shell said.

Besides economic growth in Asia, other drivers would be emission reduction efforts in the heavy industry and transport, as well as demand in the AI sector, Shell said.

On Shell’s Capital Markets Day on March 25, it declared a goal of growing its LNG sales by four to five percent a year through 2030.

Last year Shell sold 65.8 million metric tons of LNG, while it recorded 29.1 million metric tons of liquefaction volumes. Australia accounted for the bulk of Shell’s liquefaction volumes in 2024 with 14.4 million metric tons, followed by Trinidad and Tobago with four million metric tons and Nigeria with 3.5 million metric tons, according to the company’s annual report.

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