LNG

Shell Plc has confirmed its shareholding with four other partners in the new LNG export plant being developed in the United Arab Emirates by Abu Dhabi National Oil Company’s (ADNOC) at Al Ruwais.

Murban crude oil in Abu Dhabi that usually trades at around $3 a barrel below dated Brent crude was trading at $90 a barrel on April 14 after Iran launched its first ever direct state-on-state attack on Israel using drones and cruise missiles, indicating that oil and gas prices in Europe will rise on Monday April 15, though the increase in Brent price could be limited to under $95 a barrel because of previous factoring in of the ongoing crisis.

The Japan Bank for International Cooperation (JBIC) has signed an agreement with Abu Dhabi National Oil Co. (ADNOC) to proceed with further discussions for financing under the bank’s decarbonisation programme as ADNOC and a subsidiary have also pledged to continue supplying LNG to the Japanese along with long-term crude oil supplies.

“ADNOC is a leading energy company wholly owned by the Emirate of Abu Dhabi with a clear intent to decarbonise its operations,” said JBIC.

“It has ambitions of achieving net zero emissions by 2045, promoting renewable energy, hydrogen and ammonia, carbon capture and storage (CCS), and other green energy initiatives,” explained JBIC in regard to the leading energy company in the United Arab Emirates.

“The heads of agreement is intended to aim at building a consensus in which JBIC will provide a credit line to ADNOC under ‘green operations’ to support projects related to decarbonisation and the energy transition implemented by ADNOC or its subsidiaries,” the state-owned Japanese bank added.

Carbon-capture and storage (CCS) is a technology that separates and captures CO2 that would otherwise become a greenhouse-gas and stores it in deep-water caverns or other geological formations.

ADNOC spin-off

ADNOC Gas, which was spun-off in March 2023 to become a separate company, is estimated to have the seventh-largest gas reserves globally and has signed supply agreements with Japanese companies.

The latest was signed in October 2023 with the trading subsidiary of Japan's power generation company Jera Co. Inc.

The multi-year agreement with Jera Global Markets, a utility-backed energy trader specialising in LNG and other fuels, builds on the energy partnership between the UAE and Japan.

The ADNOC gas subsidiary also signed a five-year LNG supply agreement with Japan Petroleum Exploration (JAPEX) in August 2023.

JBIC noted that in addition to supplying LNG to Japanese import terminals the UAE emirate of Abu Dhabi was also key and long-term supplier of oil to Japan.

“As a stable and important supplier of crude oil to Japan for more than 40 years, Abu Dhabi is a strategic partner and a very important ally for Japan's energy resources strategy,” said JBIC.

High potential

“In addition, Abu Dhabi has high potential in the sector of decarbonisation and energy transition as it has abundant resources for renewable energy and subterranean structures suitable for CCS,” JBIC explained.

“The credit line under the HOA aims to support ADNOC’s initiatives for decarbonisation and to create opportunities for collaboration between Japanese companies and ADNOC, and it is expected to contribute towards realising the decarbonised societies that Japan and Abu Dhabi are aiming for,” JBIC declared.

As Japan's policy-based financial institution, JBIC said it would continue to provide financial support for sustainable development efforts, including those for global environmental preservation, by drawing on its various financial facilities for structuring projects financially and by “performing its risk-assuming” function.

Kent, the privately-owned international integrated energy services company headquartered in Dubai in the United Arab Emirates, has won a natural gas pipeline project contract to improve energy security for some of the smaller of the seven emirates that make up the UAE.

The Kent group, which is backed by private equity firm Bluewater, was named as the project management consultant (PMC) for the new pipeline in the northern UAE to supply RAKGAS.

RAKGAS is a state-owned energy business set up in 1984 in Ras Al Khaimah, transitioning from a gas company to a diverse energy provider.

Ras Al Khaimah is the largest city and capital of the emirate of Ras Al Khaimah.

It is the sixth-largest city in the UAE after Dubai, Abu Dhabi, Sharjah, Al Ain and Ajman.

Pipeline route

The pipeline will stretch from the Taweelah-Fujairah Gas Pipeline to Ras Al Khaimah with a connection to the Sajaa gas storage in the Sharjah emirate.   

The Taweelah-Fujairah link is an existing natural gas pipeline running for 244 kilometres (152 miles) in length from Taweelah in Abu Dhabi to Al Fujairah.

Kent will be responsible for coordinating efforts between RAKGAS and the front-end engineering and design (FEED) study contractor, ensuring that the project’s progression remains on target and aligned with its planned objectives.

“Collaborating with Kent on this project is a testament to our vision for energy supply in the region,” said RAKGAS Chief Executive Chris Wood.

“Their expertise and experience in the UAE will steer this project to success, ensuring we deliver on our commitments for energy security in Ras Al Khaimah,” Woods stated.

Partnership

Tush Doshi, Chief Operating Officer at Kent, said he was proud to partner with RAKGAS on this project.

“It will allow us to bring our world-class PMC delivery expertise to the Northern Emirates,” Doshi explained.

“We look forward to a long-lasting relationship with RAKGAS, as we ensure a continuous and seamless execution across leading energy projects in the region,” said the Kent COO.

Both Kent and RAKGAS added that they had adopted a “proactive approach” to addressing the region’s energy needs.

The Kent group is growing as a Middle East player. It gained some engineering traction in July 2021 when it completed the acquisition of the majority of the oil and gas division of Montreal, Canada-based engineers SNC-Lavalin.

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. 

Abu Dhabi National Oil Company (Adnoc) has awarded a contract valued at more than 1.47 billion United Arab Emirate dirhams ($400M) to US LNG equipment and technology-maker Baker Hughes for the supply of two all-electric compression systems for the UAE’s planned second LNG export plant to be located at Al Ruwais Industrial City.

The LNG trains will comprise energy efficient Baker Hughes technology, including compressors driven by 75 megawatt electric motors.

 “The Ruwais LNG plant will be the first LNG project in the Middle East and North Africa region to run on clean power, making it one of the lowest carbon intensity LNG facilities in the world,” said a statement.

Innovation

Fatema Al-Nuaimi, Executive Vice President of Adnoc’s Downstream Business, said that as the first clean electricity-powered LNG facility in the Middle East, the Ruwais LNG project reinforced Adnoc’s commitment to innovation.

“The project aligns with Adnoc’s objectives to grow our energy portfolio with lower-carbon solutions, reinforcing our position as a reliable global supplier of natural gas and contributing to enhancing global energy security,” added Al-Nuaimi.

The Ruwais LNG project consists of two 4.8 million metric tonnes annum liquefaction Trains with a total nameplate capacity of 9.6 MTPA.

When completed, it will more than double Adnoc’s LNG production target capacity to meet increased global demand for natural gas.

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

Baker Hughes and Adnoc announced the award at the ADIPEC oil and gas and energy conference and exhibition in the UAE.

The US company, which will book the Adnoc order in fourth-quarter earnings, said the two LNG Trains would be driven by the Baker Hughes BRUSH electric motor technology and feature the company’s world-class compressor system.

Portfolio

“This award represents an important milestone for Baker Hughes in the LNG market and demonstrates the strength of our portfolio, which we strategically expanded through the BRUSH Power Generation acquisition in 2022,”  explained Ganesh Ramaswamy, Executive Vice President of Industrial & Energy Technology at Baker Hughes. 

“Over the next decade, electrification will play a critical role in the energy transition, enabling further reduction of the carbon emissions footprint of natural gas,” added Ramaswamy.

“We are incredibly honored that Adnoc Gas, for and on behalf of Adnoc, has chosen Baker Hughes as a trusted partner to support their vision to increase LNG production while further decarbonizing their operations,” Ramaswamy stated.

Baker Hughes noted that the award continued the positive demand momentum in 2023 for the company’s gas technology equipment portfolio after securing several major LNG orders throughout the year. 

The first ever liquefied natural gas cargo paid for in Chinese yuan instead of US dollars has been unloaded at an import terminal in China’s southern Guangdong province.

ADNOC Gas, the recently spun-off subsidiary of Abu Dhabi National Oil Co (ADNOC), has signed its first big deal since the floatation in the form of a three-year LNG supply agreement with French major TotalEnergies.

Following an initial public offering completed in March 2023, ADNOC Gas is now listed on the Abu Dhabi Securities Exchange as a separate company and is responsible for running Abu Dhabi’s world-scale LNG, natural gas processing and gas marketing operations in the United Arab Emirates.

The ADNOC Gas liquefaction plant on Das Island in the Arabian Gulf currently has export capacity of 6 million tonnes per annum and TotalEnergies is already a customer.

A statement said that the ADNOC Gas supply deal with TotalEnergies was with the French company’s Gas and Power unit and was for a period of three years, though the volumes involved were not immediately disclosed.

“Our new LNG supply agreement with TotalEnergies represents another significant milestone in our strategy to expand our global reach and strengthen our position,” said Ahmed Mohamed Alebri, Chief Executive of ADNOC Gas.

Commitment

“This agreement reflects our commitment to meeting the needs of our customers by offering supply security, price competitiveness,and flexibility,” Alberi added.

TotalEnergies has a long-standing presence in the UAE, having operated in the country for more than 80 years.

“We are pleased to have signed this three-year contract with our long-standing strategic partner,” said Thomas Maurisse, Senior Vice President LNG at TotalEnergies.

“These additional volumes will strengthen our global LNG portfolio and our ability to supply the growing Asian markets,” Maurisse added.

The three-year contract is expected to commence in 2023 and will run through 2025.

The ADNOC Gas IPO followed the sale of 5 percent of its shares for around $2.5 billion and the company is now listed on the Abu Dhabi Securities Exchange.

In addition to operating the Das Island LNG plant ADNOC Gas now independently runs eight processing sites, both onshore and offshore, and has a pipeline network of over 3,250 kilometres (2,020 miles) in length in the region.

Existing joint venture partners in the company’s LNG plant include Japan’s Mitsui & Co and UK major BP, as well as TotalEnergies.

TotalEnergies is also a gas-processing partner of ADNOC Gas and Shell and Thailand’s PTT Exploration and Production have similar joint venture partnerships with the company.

Gulf Marine Services Plc, the Abu Dhabi company listed on the London Stock Exchange and which has offices in the oil and gas and LNG producing nations of the Arabian Gulf for its offshore support vessel fleet, reported solid annual profits and revenues.

The Philippines has entered the LNG importer list in a low-key way after years of planning as a cool-down cargo was delivered to Subic Bay for the Floating Storage Unit (FSU) “Ish” as part of the commissioning of the first LNG terminal in Batangas Bay and a second vessel for a separate project is scheduled to arrive in July.