BP, Mitsui & Co, Shell, and TotalEnergiesare set to each acquire a 10pct stake in Abu Dhabi's Ruwais LNG project, joining project leader ADNOC. The project aims to more than double the UAE's LNG capacity to 15mtpa. With 70pct of capacity already committed through long-term agreements, it aligns with the partners’ LNG growth strategies. Meanwhile, our data indicates a potential stabilisation in the UAE's LNG exports following protracted decline since 2021.
BP has announced its intention to acquire a 10pct stake in the planned Ruwais LNG project in Abu Dhabi's Al Ruwais Industrial City, pending regulatory approvals.
ADNOC will lead the project with a 60pct interest, while BP, Mitsui & Co, Shell, and TotalEnergies will each hold 10pct.
ADNOC had previously announced its final investment decision for the project in June.
Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Chairman of the Abu Dhabi Executive Council witnessed the international partners’ signing ceremony.
Long-term deals
ADNOC has signed several new long-term LNG supply agreements with international partners, among which is the delivery of 1.0 million tonnes per annum (mtpa) to Shell and 0.60mtpa to Mitsui & Co., increasing Ruwais LNG’s committed production capacity to 70pct.
Sultan Ahmed Al Jaber, ADNOC's Managing Director and Group CEO, highlighted Abu Dhabi's significant gas reserves and their role in supporting Emirati gas self-sufficiency, industrial growth, and diversification. He welcomed the new partners to the project, BP’s statement elaborated.
The Ruwais LNG project is planned to include two liquefaction trains, each with a capacity of 4.80mtpa to achieve a total of 9.60mtpa.
The new facility will more than double ADNOC’s UAE LNG production capacity to around 15mtpa.
Strategy alignment
This investment aligns with BP's strategy to develop competitive gas positions and grow its LNG portfolio.
It meets the company's expected return threshold for oil and gas investments and fits within its financial targets, including capital expenditure of around US$16 billion for both 2024 and 2025.
The announcement builds upon the 50-year relationship between ADNOC and BP, reinforcing their strategic partnership across energy, renewables, and carbon capture and storage technology.
This collaboration extends their existing relationship in ADNOC's onshore concession in Abu Dhabi.
Enthusiasm
The CEOs of BP, Mitsui & Co., Shell, and TotalEnergies underscored the importance of their long-standing partnerships with ADNOC and each other in the industry and expressed their enthusiasm about joining ADNOC's Ruwais LNG project.
Each emphasized how the project aligns with their company's strategies and goals.
BP's Auchincloss highlighted the expansion of their Middle Eastern gas presence and global LNG business whilst Mitsui's Hori stressed LNG's role in stable energy supply and climate change response.
Moreover, Shell's Sawan focused on creating value with reduced emissions. Similarly, TotalEnergies' Pouyanné emphasized the project's low carbon intensity, aligning with commitments made at COP28.
Export stabilisation
The UAE’s LNG production has exhibited mixed performance since 2020, our data shows.
Following growth in 2020 and 2021, when annual production increased from 5.13mmt to a peak of 5.56mmt, the Das Island plant suffered a protracted export decline, with annual production dropping to 4.66mmt in 2023.
However, our data for 1H 2024 hints at a potential export stabilisation.
