Abu Dhabi’s ADNOC, Osaka Gas sign initial agreement for LNG delivery

Image credit: Christophe Viseux/ Getty Images

Abu Dhabi National Oil Company (ADNOC) said on Tuesday that it has signed a long-term heads of agreement (HOA) with Japanese utilities provider Osaka Gas for the delivery of up to 0.8 million metric tonnes per annum (mmtpa) of liquefied natural gas (LNG).

The contract will see LNG cargoes shipped to the destination ports of Osaka Gas and its Singapore-based subsidiary, Osaka Gas Energy Supply and Trading.

“The agreement further enhances ADNOC’s position as a reliable and responsible global energy provider and reflects our commitment to help meet Japan’s energy needs with secure and sustainable energy solutions,” said Rashid Khalfan Al Mazrouei, ADNOC senior vice president of marketing.

The deal marks the first long-term LNG deal between Osaka Gas and ADNOC. Under the agreement, the contract is expected to start in the late 2020s.

Osaka Gas and ADNOC will work together to conclude a detailed sale and purchase agreement in the coming months based on the terms of the HOA.

ADNOC’s global ambitions

The LNG will be primarily sourced from the Ruwais LNG project, which is under development in Al Ruwais Industrial City, Al Dhafra, in Abu Dhabi. ADNOC said, in a statement, that the project is expected to start commercial operations in 2028 as the first LNG export facility in the Middle East and North Africa region to run on clean power.

The facility will leverage artificial intelligence and innovative technologies to enhance safety, minimise emissions and drive efficiency.

“The Ruwais LNG project supports our broader strategy to expand our global LNG footprint to enable the energy transition,” said Al Mazrouei.

The Ruwais LNG project will consist of two 4.8mmtpa LNG liquefaction trains with a total capacity of 9.6mmtpa, more than doubling ADNOC’s existing UAE LNG production capacity to around 15mmtpa.

Meanwhile, the deal with Osaka Gas follows several LNG sales agreements, including those with Japan Petroleum Exploration Company, TotalEnergies Gas and Power, Indian Oil Corporation (IOCL), PetroChina International and GAIL India.

ADNOC continues to invest domestically to position itself to meet both local and international demand for natural gas. The state-owned energy giant plans to more than double its LNG production capacity to meet rising global demand through its new project.

Earlier in July, bp, Mitsui & Co., Shell and TotalEnergies acquired a combined 40 per cent stake in the Ruwais LNG project as the global demand for natural gas is expected to surge by more than 50 per cent by 2040.

Read: ADNOC’s Ruwais LNG sells 40% stake to Shell, Total, BP, Mitsui