Abu Dhabi National Oil Company (Adnoc) and India’s Gail signed a preliminary agreement to explore collaboration in liquefied natural gas supply and decarbonisation, including short- and long-term LNG sales agreements.
The agreement also includes “potential optimisation” of LNG trading activities, the review of joint equity investments in renewables and the monitoring of greenhouse gasses for LNG cargoes, to support low carbon LNG supplies, Adnoc said in a statement on Monday.
“India is a strategic partner of the UAE, and we have a strong and long-standing bilateral relationship,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc.
“Through this important new agreement, Adnoc and Gail will seek opportunities to broaden our commercial partnership, with a particular focus on lower carbon energy supplies, in this case LNG, and joint opportunities for collaboration in new projects, decarbonisation efforts and renewable energy.”
Global trade in LNG rose 6 per cent to 380 million tonnes in 2021 on the back of higher demand, as economies recovered from the coronavirus-induced slowdown and countries focused on cutting emissions.
China, the world's second-largest economy, and South Korea led the growth in LNG demand in 2021, according to Shell's annual LNG Outlook report.
This agreement “opens up opportunities for both Gail and Adnoc in the energy sector, which, in turn, helps to boost the trade and commerce relations between the two nations”, said Hardeep Singh Puri, India’s Minister of Petroleum and Natural Gas.
The latest agreement comes as India, Asia’s third-largest economy, and the UAE focus on strengthening their trade and economic ties.
This year, the two countries signed the Comprehensive Economic Partnership Agreement, with the pact expected to boost non-oil trade between the two countries to $100 billion in five years' time from $60bn currently, opening additional avenues of investment.
Gail is one of India’s largest natural gas companies, with operations across the value chain, including exploration and production, processing, transmission, distribution, marketing, petrochemicals, LNG trading and shipping and others.
Adnoc was the first LNG producer in the Middle East and has more than 40 years of experience in the market.
It is in the midst of a major expansion of its natural gas business, accelerating production to meet both domestic and international demand.
This year, Adnoc’s logistics and services subsidiary Adnoc L&S bought three new LNG vessels as the company expands its fleet to meet higher demand for LNG.
Adnoc alsosigned a deal to supply LNG to German energy company RWE during a visit by Chancellor Olaf Scholz to the Gulf in September to secure energy pacts for Europe's biggest economy.