State-owned Abu Dhabi National Oil Company has extended its gas supply agreement with subsidiary Adnoc LNG until 2040, replacing an earlier deal expiring in the first quarter of 2019.
The Adnoc unit has signed seven agreements for the sale of over 4.2 million tonnes of LNG annually , with a growing emphasis on locking shorter-term contracts to respond to growing demand for the cleaner fuel, the company said in a statement on Wednesday.
“The LNG market is projected to grow at a robust pace, fueled by demand from Asia and developing countries who want access to a clean and affordable source of energy,” said Abdulaziz Alhajri, director of Adnoc's downstream directorate.
“Adnoc LNG is well-positioned to leverage this opportunity and is now modernising its commercial approach to transition from a single-customer to a multi-customer business that includes a number of global utilities as well as portfolio players and traders."
The agreements follow Adnoc’s recent announcement of gas discoveries of up to 15 trillion cubic feet, an addition of 7.1 per cent to existing reserves. The UAE, which had 3.1 per cent of global proven gas reserves prior to the discoveries, is expected to become a net gas exporter and develop LNG export capabilities.
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The contracts would cover supply of LNG on a mid-term basis starting from April 2019, and have been signed with several key global buyers, including Japan’s Jera, Adnoc said.
Jera, which is the biggest buyer from Adnoc LNG, announced in August its plans to purchase eight cargoes annually for a period of three years beginning in April 2019.
Discussions were under way with other potential customers to cater to mid and long-term contracts, the company added.
Adnoc LNG is a joint venture between Adnoc, which holds the majority 70 per cent share, with the remainder shared between Japan’s Mitsui, which has a 15 per cent stake, BP, with 10 per cent and France’s Total with five per cent interest. The LNG arm, based offshore on Das Island, has been operational since 1977.