Adnoc Gas, estimated to have the seventh largest gas reserves globally, has signed an agreement to supply liquefied natural gas worth $500 million to $700 million to a trading subsidiary of Japan's power generation company Jera.
The multi-year agreement with Jera Global Markets, a utility-backed seaborne energy trader specialising in LNG, coal and freight, builds on the energy partnership between the UAE and Japan, Adnoc said on Wednesday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
The move is line with the company's goals of growing its global presence, particularly in the Asian market, Adnoc Gas said.
“This LNG supply agreement marks a significant milestone in Adnoc Gas' long-standing strategic partnership with Jera, demonstrating our continuous and shared commitment for advancing sustainability in the energy sector and supporting a reliable and cleaner energy future for Japan and beyond,” its chief executive Ahmed Alebri said.
The latest deal brings the total value of LNG supply agreements signed by Adnoc Gas since its listing in March this year to “between $9.4 billion and $12 billion”, the company said.
Adnoc Gas, which has access to 95 per cent of the UAE's natural gas reserves, supplies more than 60 per cent of the country's needs.
It has rapidly expanded its exports over the past few quarters as demand for less polluting fuel picks up globally amid decarbonisation efforts.
Last month, it signed a $450 million to $550 million LNG supply deal with PetroChina. The company signed a five-year LNG supply agreement of the same value with Japan Petroleum Exploration in August.
In July, the Adnoc subsidiary signed a 14-year supply agreement with Indian Oil Corporation, the South Asian country’s largest refiner.
Competition to secure LNG supplies has increased since Russia's invasion of Ukraine last year, with Europe importing record volumes of the supercooled fuel to replace Moscow's gas supplies.
Global LNG trade hit a high of $450 billion in 2022 amid a surge in European demand, according to the International Energy Agency.
Natural gas continues to play a crucial role as a transitional fuel with lower carbon emissions, compared to other fossil fuels. It also serves as an important raw material in industrial value chains, Adnoc Gas said on Wednesday.
“The Jera Group continuously looks towards strengthening our global LNG portfolio with stable, flexible and competitive LNG supply, which is essential in the energy transition,” said Kazunori Kasai, chairman of Jera Global Markets and chief optimisation officer at Jera.
Built in the 1970s, Adnoc's LNG refineries on Das Island supplied LNG to the Tokyo Electric Power Company, one of the parent companies of Jera, for more than 40 years, Adnoc said.
“Japan is a vital energy partner for the UAE, and this agreement bolsters Adnoc's growing track record of fostering strategic partnerships with Japanese energy companies,” the company said.
Japan, the world’s third-largest economy and fourth-largest crude importer, is looking to bolster its energy security by entering into long-term LNG agreements and adding more renewable resources to its overall energy mix.
In December last year, Inpex, Japan’s largest oil and gas exploration company, signed an agreement with US-based Venture Global LNG for the supply of a million tonnes annually for the next 20 years.
In July, the UAE and Japan signed 23 agreements and initial pacts during a business forum aimed at bolstering economic, trade and investment ties between the two countries in the fields of energy, industry, advanced technology, artificial intelligence, space, health, transport, environmental conservation and circular economy.
The value of trade between the two countries reached $51.7 billion in 2022 while non-oil trade exchange amounted to $14.7 billion, of which non-oil imports to the UAE were $12 billion.