Abu Dhabi National Oil Company’s liquefied natural gas subsidiary signed a six-year agreement with Vitol, the world’s largest energy trader, for 1.8 million tonnes a year of the super-chilled fuel as of 2022.
Adnoc LNG also signed a long-term agreement with Total for the sale of 750,000 tonnes of the fuel in 2021 and 2022.
“These agreements demonstrate the success of our commercial strategy in unprecedented times and confirm the market’s growing confidence in demand for natural gas, said Adnoc LNG chief executive Fatema Al Nuaimi.
"LNG is a fuel that can support the transition to clean energy, especially in many Asian markets where switching to gas will result in significant environmental gains.”
Demand for LNG globally is currently projected to grow by up to 5 per cent annually over the next 20 years, as it can contribute to better air quality and lower green house gas emissions in the power sector. This makes LNG ideal for the transition to a low-carbon energy future, supporting a mix of fuels to help countries balance energy demand with their clean energy goals.
“This new supply agreement contributes to the growth and flexibility of Total’s LNG portfolio and strengthens our long standing relationship with Adnoc LNG," Thomas Maurisse, Total’s senior vice president of LNG, said.
Until last year, Adnoc supplied 90 per cent of its LNG to Japan's Jera, its single biggest offtaker. The state-owned oil company has since diversified its customer base, supplying 90 per cent of its LNG volumes to clients in more than eight countries across South and South-East Asia, including India, China, South Korea and Taiwan.
“For Vitol LNG, this most recent development strengthens our ability to ensure diverse and secure supply to our customers around the world," Pablo Galante Escobar, Vitol’s head of LNG, said.
Adnoc LNG is a joint venture between Adnoc, which holds a 70 per cent share, Japan’s Mitsui with 15 per cent stake, BP with 10 per cent and Total with the remaining 5 per cent.
Adnoc produces 6 million tonnes of LNG annually from its facility on Das Island, which has been operational since 1977.
Vitol has a presence across the energy industry from oil to power, renewables and carbon. With 250 ships transporting cargoes at sea, it trades 8 million barrels of crude oil and products per day and 10.5 million metric tonnes of LNG per annum.
The company’s clients include national oil companies, industrial companies and utilities.
The UAE is reliant on imports to meet its gas needs and growing demand for cleaner fuel to generate electricity and power industry. Unlocking its gas caps, much of which is sour – having high sulphur content – as well as utilising its new discoveries for additional LNG production is part of Adnoc's strategy to maximise value from the fuel.
Abu Dhabi has begun to prioritise the development of gas from unconventional reserves. Last November, Adnoc announced the discovery of additional reserves of 7bn "stock tank" barrels of oil, 58 trillion cubic feet of conventional gas and 160tn cf of unconventional gas.
