Adnoc signs 10-year gas supply agreements with Emirates Steel and Arkan

Adnoc has the potential to produce 11 billion cubic feet of natural gas and over 1 billion cf of sour gas per day

Adnoc is the main supplier of natural gas to industries in the UAE and accounts for over two-thirds of supply. Courtesy: Adnoc

Abu Dhabi National Oil Company signed long-term gas sales agreements with the UAE's largest steel producer, Emirates Steel, and construction and building materials company Arkan.

Adnoc will supply natural gas to the manufacturing companies for the next 10 years.

"These important agreements strengthen Adnoc's relationship with both companies as we continue to provide stable and reliable energy supplies to power Abu Dhabi's industrial sector, enabling industry to thrive and 'Make it in the Emirates'," said Khalid Salmeen, executive director of Adnoc's downstream industry, marketing and trading directorate.

Adnoc, which produces and sells oil on behalf of the UAE, Opec's third-largest producer, has been looking to develop its gas resources.

The company has the potential to produce 11 billion cubic feet per day of natural gas and over 1 billion cf/d of sour gas. A significant proportion of gas fields in Abu Dhabi are sour, a term that refers to the presence of sulphurous compounds in the gas.

The national oil company is also the main provider of natural gas to industries in the UAE, accounting for more than two-thirds of supply.

“This agreement will ensure the security of supply and cost of natural gas to our plants, and demonstrates Adnoc's continued support of the UAE’s industrial sector," said Emirates Steel chief executive Saeed Al Remeithi.

Adnoc is spending Dh448 billion ($122bn) over the next five years in developing its upstream hydrocarbon assets. Of this planned investment, Dh160bn will be directed towards the local economy.

The company is also looking to create synergies with its natural gas production and Abu Dhabi's plans to increase blue hydrogen production.

Blue hydrogen is derived from natural gas feedstocks.

On Monday, Adnoc announced the development of a massive blue ammonia project in its downstream centre in Ruwais as it looks to increase the UAE’s hydrogen economy.

Earlier this month, Abu Dhabi's General Holding Corporation, Senaat, which owns both Emirates Steel and Arkan, announced a proposal to merge the companies to create an industrial business with combined assets of Dh13 billion ($3.54bn).