Adnoc Gas has signed a 10-year agreement to supply liquefied natural gas (LNG) to Gail India as demand for low-carbon fuel remains strong amid decarbonisation efforts.
The company, estimated to have the seventh largest gas reserves globally, will supply 0.5 million metric tonnes per annum of LNG to Gail India, Adnoc Gas said in a statement on Tuesday to the Abu Dhabi Securities Exchange, where its shares are traded.
It did not disclose the total value of the agreement.
“This long-term LNG supply agreement with Gail India marks a significant step forward in our commitment to continue providing reliable and sustainable energy solutions to our partners and customers around the world,” Ahmed Alebri, chief executive of Adnoc Gas, said.
“India continues to be a key market for Adnoc Gas and this latest supply agreement underscores our ongoing dedication to fostering long-term partnerships that promote responsible energy consumption.”
India, Asia's third-largest economy, aims to increase the share of natural gas in the country's total energy mix to 15 per cent by 2030, from about 6 per cent currently.
The country’s LNG import capacity nearly doubled last year, from 21 million tonnes a year in 2014, Indian Prime Minister Narendra Modi said in a speech in February.
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 and has customers in more than 20 countries.
It has signed similar agreements with other companies globally, including Japan Petroleum Exploration (Japex), TotalEnergies Gas and Power, Indian Oil Corporation and PetroChina International.
The agreement with Japex is valued at between $450 million and $550 million, while the deal with Indian Oil Corporation, signed in July, is valued at between $7 billion and $9 billion.
The company signed a three-year supply agreement worth $1.2 billion with TotalEnergies Gas and Power, a subsidiary of France’s TotalEnergies, for the export of LNG in May.
In September, it signed a deal with PetroChina, a subsidiary of China’s state-owned energy giant PetroChina, valued between $450 million and $550 million.
Natural gas is a key transitional fuel, with lower carbon emissions than other fossil fuels. It also serves as an important raw material in industrial value chains.
“The world continues to witness long-term structural demand growth for natural gas, an important fuel in a just and responsible global energy transition,” Adnoc Gas said.
It added that the company remains focused on boosting its investments to drive growth, and maintained a strong sales momentum in 2023 with LNG supply agreements valued between $9.4 billion and $12 billion.
Adnoc is also “progressing” on a new low-carbon Ruwais LNG project, under development in Al Ruwais Industrial City, which is set to be the first LNG export unit in the Middle East and North Africa region to run on clean power, supporting Adnoc’s Net Zero by 2045 ambition.
When completed, the project is expected to consist of two 4.8 mmtpa (million metric tonne per annum) LNG liquefaction trains with a total capacity of 9.6 mmtpa.
Earlier this month, Adnoc’s board increased its budget allocation for decarbonisation projects, technology and lower-carbon solutions to $23 billion, up from the previously earmarked amount of $15 billion.
