Adnoc signs 15-year LNG sales and purchase deal with Indian Oil

Abu Dhabi company to supply one million tonnes of LNG a year, mainly from Ruwais project

Indian Oil is set to become Adnoc's largest LNG customer from 2029, with total offtake reaching 2.2 mtpa. Photo: Adnoc

Adnoc Gas has signed a 15-year sales and purchase deal to supply liquefied natural gas to the state-backed Indian Oil Corporation, amid growing energy demand in India and an aim to improve its energy security.

The Abu Dhabi company will supply one million tonnes per annum (mtpa) of LNG, sourced mainly from its lower-carbon Ruwais LNG project, to India's biggest integrated and diversified energy company, Adnoc said on Wednesday. The sale and purchase deal converts a previous heads of agreement announcement into a definitive pact.

"This long-term agreement with Indian Oil underscores the robust energy relations between the UAE and India," said Rashid Khalfan Al Mazrouei, Adnoc's senior vice president of marketing.

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Adnoc signed a contract with Indian Oil in September last year, marking a preliminary 15-year agreement with the company to supply one million tonnes of LNG a year to India.

Indian Oil is set to become the largest buyer of LNG from Adnoc by 2029 with a total offtake of 2.2 mtpa – comprising 1.2 mtpa from Adnoc's Das Island operations and 1 mtpa from the Ruwais LNG project.

The move comes on the back of the comprehensive economic partnership agreement the UAE and India signed in 2022 to boost trade ties. The Cepa helped non-oil trade between the UAE and India to increase by 5.8 per cent to $50.5 billion in the first 12 months after it took effect in May 2022. The countries hope the Cepa will help them increase trade to $100 billion by 2030.

Strengthening energy ties with India

The latest agreement with Indian Oil strengthens Adnoc Gas’s partnership with significant Indian players as it builds on deals with Hindustan Petroleum Corporation (HPCL) and GAIL India and emphasises its global footprint across the high-demand Asian LNG market. India is aiming for natural gas to account for 15 per cent of its total energy mix by 2030.

Adnoc this month signed a 10-year preliminary agreement with HPCL to supply LNG to the Indian fuel retailer, as demand for low-carbon fuel remains strong amid decarbonisation efforts.

In February, Adnoc Gas signed a 14-year deal to supply up to 1.2 million tonnes of LNG a year to state-backed Indian Oil. The agreement is valued between $7 billion and $9 billion, Adnoc Gas said at the time.

Adnoc also signed a 10-year agreement to supply LNG to state-owned energy corporation Gail India in January last year, without disclosing the total value of that agreement. "Adnoc will continue to provide more lower-carbon gas to meet growing global demand, fuel industries and power homes," Mr Al Mazrouei said.

LNG demand to rise in 2026

After a slowdown this year, growth in global demand for natural gas is expected to rise in 2026, according to the International Energy Agency’s quarterly Gas Market Report in July.

The LNG market fundamentals remained tight in the first half of 2025 due to a combination of lower Russian piped gas exports to the EU, relatively modest growth in LNG output and higher storage injection needs in Europe, the report said.

Amid global macroeconomic uncertainty, the world's natural gas demand growth is forecast to slow from 2.8 per cent in 2024 to about 1.3 per cent in 2025.

The wave of LNG supply that is set to come online is poised to ease fundamentals and spur additional demand, especially in Asia

Keisuke Sadamori,
IEA director of energy markets and security

However, global LNG demand growth will pick up again in 2026 and rise to about 2 per cent as "a considerable increase in LNG supply eases market fundamentals and fosters stronger demand growth in Asia", the IEA said.

In 2026, LNG supply is set to rise by 7 per cent – its largest increase since 2019 – as new projects come online in the US, Canada and Qatar. "The backdrop for global gas markets is shifting as we enter the second half of this year and look towards 2026. The wave of LNG supply that is set to come online is poised to ease fundamentals and spur additional demand, especially in Asia,” said Keisuke Sadamori, the IEA's director of energy markets and security. “However, our latest forecast is subject to unusually high levels of uncertainty over the global macroeconomic outlook and the volatile geopolitical environment."

Adnoc's Ruwais LNG project, currently under development in Al Ruwais Industrial City in Abu Dhabi, is expected to start commercial operations in 2028. So far, more than 8 mtpa of the project’s 9.6 mtpa production capacity has been committed to international customers through long-term agreements, Adnoc said.

Adnoc Gas said in November 2024 that it expects to acquire Adnoc's 60 per cent stake in the Ruwais LNG project in the second half of 2028.

Once completed, the project, comprising two 4.8 mtpa liquefaction trains with a combined capacity of 9.6 mtpa, will more than double Adnoc Gas's existing operated LNG production capacity to about 15 mtpa.