LNG

Adnoc Gas, the natural gas and LNG producer in Abu Dhabi in the United Arab Emirates, has signed a 10-year supply agreement with GAIL India, the Indian pipeline gas and city-gas player whose facilities include the Dabhol LNG import terminal south of Mumbai.

Under terms of the deal, Adnoc Gas said it would supply GAIL with 500,000 tonnes per annum of LNG.

The latest Adnoc Gas agreement for LNG volumes follows similar deals signed with Japan Petroleum Exploration, France’s TotalEnergies, Indian Oil Corp. and PetroChina International.

Adnoc Gas, which was spun-off in March 2023 from Abu Dhabi National Oil Co. (ADNOC) to become a separate company, is estimated to have the seventh-largest gas reserves globally.

Step forward

“This long-term LNG supply agreement with GAIL India marks a significant step forward in our commitment to continue providing reliable and sustainable energy solutions to our partners and customers around the world,” said Ahmed Mohamed Alebri, Chief Executive of Adnoc Gas.

“India continues to be a key market for Adnoc Gas and this latest supply agreement underscores our ongoing dedication to fostering long-term partnerships,” added Alebri.

The main Adnoc Gas LNG operation is the the Das Island plant in Abu Dhabi with three liquefaction Trains and 6 MTPA of output.

The Das Island facility has operated since 1977 and was the first export plant established in the Arabian Gulf.

“Adnoc Gas continues to leverage opportunities arising from ADNOC’s integrated gas masterplan, which links every part of the gas value chain in the UAE,” said the company.

The ADNOC Group is leading the developments for the UAE that includes the new low-carbon Ruwais LNG export project currently under development in Al Ruwais Industrial City in Abu Dhabi.

Al Ruwais project

When completed, Al Ruwais will have two liquefaction Trains each with capacity of 4.8 MTPA for a total of 9.6 MTPA.

GAIL is a leading natural gas company in West Asia with a presence in India’s gas trading, transmission, city-gas and other sectors including petrochemicals.

The New Delhi-based company currently has a 75 percent share of the gas transmission network.

Its pipeline assets are 14,490 kilometres (9,000 miles) in length and GAIL makes about 50 percent of the country’s domestic natural gas sales.

GAIL has six subsidiaries including GAIL Global USA Inc., which looks after its Cove Point LNG interests in the state of Maryland.

The company also runs an LNG trading business based in Singapore.

Other assets include a majority stake in Konkan LNG, the ownership company of India's Dabhol LNG import terminal, located in the West Coast Indian state of Maharashtra, south of Mumbai, and with 5 MTPA of capacity.

ENN Natural Gas, the leading Hong Kong-listed and independent Chinese LNG and city-gas company, has signed a supply accord for volumes from an LNG export project being developed at Al Ruwais Industrial City in the United Arab Emirates.

The Abu Dhabi National Oil Company (ADNOC) will need to invest more than $40 billion in order for the United Arab Emirates to attain natural gas self-sufficiency due to the complex nature of the country’s gas resources and as the UAE also expands LNG production.

The investment figure comes in a new report on ADNOC by the UK-based energy consultants Wood Mackenzie.

The report looks at the gas expansion plans, including sour and unconventional gas fields that were previously thought too complex technically and expensive to develop.

“The commitment to self-sufficiency is driving ADNOC to examine all options in its push for more gas,” said Alexandre Araman, the Principal Analyst of Middle East Upstream at Wood Mackenzie.

Growth strategy

“Its growth strategy, approved by the Supreme Petroleum Council, relies on the development of ultra-sour gas, unconventional and gas cap resources. Associated gas expansion is also expected to contribute as well as exploration and new discoveries,” the report said.

The report cites the Ghasha development as a critical piece of the self-sufficiency puzzle, with a target to produce 1 billion cubic feet a day of sales gas before 2030. 

The concession contains nine offshore fields in the Arabian Gulf.

“The high costs associated with an offshore ultra-sour gas development, the sulphur handling requirements and the typically low domestic gas prices result in challenging economics with cost estimates of at least $20Bln,” the report added.

The report cites the Shah Gas Development expansion as another key project and plans are underway to boost the total capacity to 1.85 bcf per day from the current level of 1.45 bcf per day.

“If this is approved, sales gas should increase from 0.74 bcf per day to 0.94 bcf per day,” said the report.

The report added that due to the ultra-sour nature of the gas at Shah, any development was always extremely challenging from both a technical and budget perspectives.

Other projects in the pipeline include large untapped unconventional gas resources at Ruwais Diyab as well as plans for developing gas caps and additional conventional gas resources, but the report states that technical issues and escalating costs could see the timelines stretched for many of the projects being planned.

Advancing

“ADNOC is moving swiftly to advance on all fronts via mega-development projects, ambitious production targets and IOC partnerships,” said Wood Mackenzie.

“But the complex and expensive nature of these resources has derailed progress with escalating costs and final investment decision delays,” it concluded.

Separately, ADNOC Gas is also development the Ruwais LNG project consisting of two liquefaction Trains of 4.8 million metric tonnes annum and total nameplate capacity of 9.6 MTPA.

The existing liquefaction plant on Das Island currently has export capacity of 6 MTPA.

Saipem, the Italian energy and LNG engineering company specializing in subsea work, has signed a letter of award with Abu Dhabi National Oil Company (Adnoc)  for a new contract related to the Hail and Ghasha natural gas development project in the United Arab Emirates.

Saipem said its share of the contract amounts to around $4.1 billion and has been awarded in consortium with the Abu Dhabi-based National Petroleum Construction Company (NPCC).

The project is aimed at developing the resources of the Hail and Ghasha natural gas fields, located offshore Abu Dhabi.

The fields lie in the Ghasha Concession block in water depth of around 328 feet and are expected to start commercial production in the next couple of years.

Saipem said the project scope of work encompassed the engineering, procurement and construction (EPC) of four drilling centres and one processing plant to be built on artificial islands, as well as various offshore structures and more than 300 kilometres (187 miles) of subsea pipelines.

Integrated

“The award is in line with Saipem’s unique capability to deliver integrated onshore and offshore projects, providing its clients with a single and reliable interface for complex full-field developments,” said the Milan-based company.

“Saipem will leverage on its state-of-the-art shallow water offshore vessels, its advanced welding technology for corrosion resistant materials, as well as its renowned engineering expertise,” Saipem added.

“This award reinforces Saipem’s long-standing relationship with ADNOC and further consolidates the company’s presence in Abu Dhabi, which includes an Engineering and Project Execution Centre, as well as a new Offshore Logistic base in Zayed Port,” Saipem explained. 

ADNOC’s partners in the Hail and Ghasha gas development with a concession term of 40 years include Italy’s Eni, Germany’s Wintershall Dea and Austria’s OMV.

The multi-billion-dollar Hail and Ghasha project is also seen as playing a vital role in meeting the UAE’s gas self-sufficiency objectives.

It also comes at a time when a second UAE LNG production project plant is being developed at Al Ruwais Industrial City. The Ruwais LNG project consists of two 4.8 million metric tonnes annum liquefaction Trains with a total nameplate capacity of 9.6 MTPA.

The existing liquefaction plant on Das Island in the Arabian Gulf currently has export capacity of 6 MTPA.