Adnoc Gas will ship liquefied natural gas cargoes to Europe or Asia depending on which market offers more profitability, a senior executive told The National.
The company, which is the integrated gas processing unit of Adnoc, produces 6 million tonnes per annum of LNG from its Das Island liquefaction plant off Abu Dhabi and most of the output is tied to long-term contracts, Peter van Driel, chief financial officer of Adnoc Gas, said in an interview on Thursday.
“We always keep a few cargoes available to play the market. If prices go up in Europe, we make sure those cargoes go to Europe,” Mr van Driel said.
“It then becomes a question of whether we see more profitability by going to the east or by going to Europe? And that is a function of price,” he added.
Persistent heatwaves in Asia are boosting gas demand in Japan and South Korea, while high inventory levels are driving down European gas prices. The EU's gas storage levels have reached about 90 per cent of capacity ahead of winter.
“Shipping plays a big role, because the sooner you're able to sail to a destination that's nearby, you have an advantage in terms of shipping cost compared to a competitor that comes from further away,” Mr van Driel said.
Adnoc Gas has not experienced a “material impact” from elevated shipping costs caused by the Red Sea shipping turmoil, he added.
Attacks on vessels by Yemen’s Houthi rebel group have disrupted global trade and led to increased insurance premiums, fuel costs and security measures for ship operators. The Suez Canal, a critical waterway connecting the Mediterranean Sea to the Red Sea, handled about 12 per cent to 15 per cent of global trade in 2023.
Adnoc Gas has signed long-term charter deals with shipping companies, protecting it from cost volatility, Mr van Driel said.
For the Abu Dhabi-based company, which has access to 95 per cent of the UAE's natural gas reserves, boosting exports of products such as LNG, liquefied petroleum gas and naphtha is crucial to its growth strategy.
“About one-third of our volumes are exported, and two-thirds remain in the UAE. However, our exports are more profitable because they account for two-thirds of the revenue,” Mr Driel said.
In the Emirates, Adnoc Gas supplies to customers, mostly utilities and industrial companies, through an extensive network of pipelines.
The company is set to acquire Adnoc’s majority stake in the Ruwais LNG project, which will have a total capacity of 9.6 million tonnes per annum. It is scheduled to start in the second half of 2028.
Last month, international energy majors BP, Japan’s Mitsui, Shell and TotalEnergies were each awarded a 10 per cent equity stake in the project.
About 70 per cent of the Ruwais LNG production capacity has already been secured through sales commitments.
Mr Driel said that Adnoc Gas remains open to mergers and acquisitions to expand into new markets, but the threshold for such moves is “very high” since operating in the UAE has been highly profitable for the company.
Adnoc Gas plans to invest more than $13 billion until 2029 to pursue domestic and international growth opportunities, the company said in an April statement.
Supply glut concerns
Adnoc Gas is expanding its LNG operations amid expectations of a market glut in the next few years, as several large projects are set to come online.
A surge in LNG projects starting from 2025 is projected to add more than 250 billion cubic metres (bcm) of new capacity annually by 2030, according to the International Energy Agency.
This additional capacity represents roughly 45 per cent of the current global LNG supply, with the most significant expansions occurring between 2025 and 2027, primarily driven by projects in the US and Qatar, the agency said in a report last year.
LNG buyers are locking in long-term contracts for future supply even though the market glut is expected to lower prices in the coming years, Mr van Driel said.
“Security of supply is what really matters. Therefore, people conclude long-term contracts, even if they know that there's a temporary imbalance between supply and demand. It's not just about price,” he added.
“Some buyers even pay a small premium to lock that in.”
In January, Adnoc Gas signed a 10-year agreement to supply 500,000 metric tonnes per annum of LNG to Gail India, a state-run natural gas company.
Emerging economies in Asia are aiming to increase the share of natural gas to reduce dependency on highly polluting coal amid an expected surge in power demand.
China, the world's biggest coal consumer, is projected to increase the use of natural gas in its primary energy mix to 12 per cent by 2030 from 8.7 per cent in 2020.
India, the second-largest coal consumer, aims to raise the share of natural gas in its total energy mix to 15 per cent by 2030, from about 6 per cent.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Zayed Sustainability Prize
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
Super Bowl LIII schedule
What Super Bowl LIII
Who is playing New England Patriots v Los Angeles Rams
Where Mercedes-Benz Stadium in Atlanta, United States
When Sunday (start time is 3.30am on Monday UAE time)
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It Was Just an Accident
Director: Jafar Panahi
Stars: Vahid Mobasseri, Mariam Afshari, Ebrahim Azizi, Hadis Pakbaten, Majid Panahi, Mohamad Ali Elyasmehr
Rating: 4/5
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
The specs: 2018 Chevrolet Trailblazer
Price, base / as tested Dh99,000 / Dh132,000
Engine 3.6L V6
Transmission: Six-speed automatic
Power 275hp @ 6,000rpm
Torque 350Nm @ 3,700rpm
Fuel economy combined 12.2L / 100km
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
The five pillars of Islam
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Mohammed bin Zayed Majlis
WHAT%20MACRO%20FACTORS%20ARE%20IMPACTING%20META%20TECH%20MARKETS%3F
%3Cp%3E%E2%80%A2%20Looming%20global%20slowdown%20and%20recession%20in%20key%20economies%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Russia-Ukraine%20war%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Interest%20rate%20hikes%20and%20the%20rising%20cost%20of%20debt%20servicing%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Oil%20price%20volatility%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Persisting%20inflationary%20pressures%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Exchange%20rate%20fluctuations%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shortage%20of%20labour%2Fskills%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20A%20resurgence%20of%20Covid%3F%3C%2Fp%3E%0A
The specs
Engine: 5.0-litre V8
Power: 480hp at 7,250rpm
Torque: 566Nm at 4,600rpm
Transmission: 10-speed auto
Fuel consumption: L/100km
Price: Dh306,495
On sale: now
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
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'HIJRAH%3A%20IN%20THE%20FOOTSTEPS%20OF%20THE%20PROPHET'
%3Cp%3E%3Cstrong%3EEdited%20by%3A%3C%2Fstrong%3E%20Idries%20Trevathan%3Cbr%3E%3Cstrong%3EPages%3A%3C%2Fstrong%3E%20240%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Hirmer%20Publishers%3Cbr%3E%3Cstrong%3EAvailable%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
It
Director: Andres Muschietti
Starring: Bill Skarsgard, Jaeden Lieberher, Sophia Lillis, Chosen Jacobs, Jeremy Ray Taylor
Three stars
Bookshops: A Reader's History by Jorge Carrión (translated from the Spanish by Peter Bush),
Biblioasis
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%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3ENomad%20Homes%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2020%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EHelen%20Chen%2C%20Damien%20Drap%2C%20and%20Dan%20Piehler%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20and%20Europe%3Cbr%3E%3Cstrong%3EIndustry%3C%2Fstrong%3E%3A%20PropTech%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2444m%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Acrew%20Capital%2C%2001%20Advisors%2C%20HighSage%20Ventures%2C%20Abstract%20Ventures%2C%20Partech%2C%20Precursor%20Ventures%2C%20Potluck%20Ventures%2C%20Knollwood%20and%20several%20undisclosed%20hedge%20funds%3C%2Fp%3E%0A
Mohammed bin Zayed Majlis
UAE currency: the story behind the money in your pockets
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Diriyah%20project%20at%20a%20glance
%3Cp%3E-%20Diriyah%E2%80%99s%201.9km%20King%20Salman%20Boulevard%2C%20a%20Parisian%20Champs-Elysees-inspired%20avenue%2C%20is%20scheduled%20for%20completion%20in%202028%3Cbr%3E-%20The%20Royal%20Diriyah%20Opera%20House%20is%20expected%20to%20be%20completed%20in%20four%20years%3Cbr%3E-%20Diriyah%E2%80%99s%20first%20of%2042%20hotels%2C%20the%20Bab%20Samhan%20hotel%2C%20will%20open%20in%20the%20first%20quarter%20of%202024%3Cbr%3E-%20On%20completion%20in%202030%2C%20the%20Diriyah%20project%20is%20forecast%20to%20accommodate%20more%20than%20100%2C000%20people%3Cbr%3E-%20The%20%2463.2%20billion%20Diriyah%20project%20will%20contribute%20%247.2%20billion%20to%20the%20kingdom%E2%80%99s%20GDP%3Cbr%3E-%20It%20will%20create%20more%20than%20178%2C000%20jobs%20and%20aims%20to%20attract%20more%20than%2050%20million%20visits%20a%20year%3Cbr%3E-%20About%202%2C000%20people%20work%20for%20the%20Diriyah%20Company%2C%20with%20more%20than%2086%20per%20cent%20being%20Saudi%20citizens%3Cbr%3E%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
Scoreline
Australia 2-1 Thailand
Australia: Juric 69', Leckie 86'
Thailand: Pokklaw 82'
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
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Killing of Qassem Suleimani
