LNG

Abu Dhabi National Oil Co. (ADNOC), the main oil and gas company of the United Arab Emirates, has as expected made a final investment decision to build a second LNG export plant sited in the industrial city of Ruwais and has also awarded engineering contracts.

A South Korean trade agreement with the United Arab Emirates has been signed in Seoul and included a future order for at least six LNG carriers from the UAE and a pledge of $30 billion of investments in Korean industries.

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.

Baker Hughes, the US liquefied natural gas equipment-maker and energy services company, swung to an annual profit compared with a previous loss as quarterly income also rose along with revenues amid an operational overhaul and among the orders booked was one for LNG from the United Arab Emirates.

JERA Global Markets, the trading arm of Japan’s largest LNG and energy buyer and utility JERA Co. Inc., and ADNOC Gas, the recently spun-off unit of Abu Dhabi National Oil Company (ADNOC) in the United Arab Emirates, have signed a multi-year LNG supply agreement. 

ADNOC Gas, the stand-alone spin-off from Abu Dhabi National Oil Company in the United Arab Emirates, has signed a natural gas supply agreement with Chinese major PetroChina International.

Abu Dhabi National Oil Company (Adnoc) has invited investment banks to pitch for roles in the initial public offering (IPO) of its natural gas business during the first half of 2023.

Several investment banks have been asked for proposals to act as joint global coordinators and bookrunners in the IPO to join New York-based Goldman Sachs as part of a planned banking syndicate, according to bankers familiar with the plans.

Adnoc is combining its gas-processing subsidiary with its main gas export unit, Adnoc LNG, into a single listed entity and has engaged Goldman Sachs as the principal bank to oversee the various transactions.

Adnoc plans to offer investors a minority stake in the new company through an IPO on the Abu Dhabi Securities Exchange in 2023.

Adnoc LNG was the first production company in the Arabian Gulf and processes feed gas at Das Island, located 160 kilometres (100 miles) off the coast of Abu Dhabi.

The LNG company also supplies one billion standard cubic feet of gas per day to the United Arab Emirates national grid, contributing to Adnoc’s commitment towards gas self-sufficiency in the UAE.

Current stakes

Adnoc LNG is majority owned by the Abu Dhabi-based firm with a 70 percent share of the company. The other shareholders are Japan’s Mitsui & Co with 15 percent, UK major BP with 10 percent and TotalEnergies with 5 percent.

Adnoc said late last month that the consolidation of the two entities would create one of the world’s largest gas-processing companies with a processing capacity of around 10 billion standard cubic feet per day.

Analysts note that Adnoc in the UAE and other nations in the region such as Qatar are overhauling their corporate capabilities to replace all Russian energy imports as early as mid-2024 as Western sanctions were imposed over the Russia's invasion of Ukraine.

The UAE is comprised of seven emirates and the leading energy emirate is Abu Dhabi, which also has the Ghasha mega-project, the world’s largest offshore sour-gas development. 

The emirates, outside of Abu Dhabi, have varying degrees of more limited energy resources in Dubai, Sharjah, Ajman, Umm Al-Quwain, Fujairah and Ras Al Khaimah,

The multi-billion-dollar Ghasha project will play a vital role in meeting the UAE’s gas self-sufficiency objectives.

Adnoc says that the Ghasha mega-project draws on its long-standing sour-gas expertise, including its Shah onshore ultra-sour gas field project, its pioneering work in the creation of artificial islands and the wide and deep sour-gas capabilities of its concession partners.

Adnoc is also currently unlocking potential unconventional gas resources as part of its integrated gas strategy and since late 2019 it has announced the discovery of 160 trillion standard cubic feet of recoverable unconventional gas.

Abu Dhabi National Oil Company (ADNOC), the oil and gas company and LNG producer in the United Arab Emirates, has awarded three framework agreements valued at 14.68 billion UAE dinars ($4 billion) for integrated drilling services to support the ongoing expansion of its oil and natural gas production activities.

McDermott, the US energy and LNG project engineering company, has outlined part of the scope of the planned Fujairah LNG production facility being developed in the fifth-largest emirate by area of the seven United Arab Emirates.

McDermott was awarded the contract by Abu Dhabi National Oil Co. (Adnoc) to provide front-end engineering and design for the plant.

The Fujairah project will be centred around a liquefaction plant with a total capacity of 9.6 million tonnes per annum.

Fujairah is located outside the Arabian Gulf on the Gulf of Oman. The shores of Fujairah extend for 70 kilometres along the coast from the city of Fujairah.

The emirate shares its boundaries with the emirates of Sharjah and Ras Al Khaimah to the west and the south respectively.

In the north, Fujairah shares its international border with the Sultanate of Oman, an established LNG producer supplying customers in Asia.

Electric drives

“The plant will be designed with electric drives for the liquefaction compressors and will incorporate several features that significantly reduce greenhouse-gas emissions, capitalizing on the experience McDermott,” said the Houston, Texas-based company.

McDermott said the Fujairah plant would benefit from the “robust capabilities and experience” of the US company in FEED performance.

Our biggest differentiator is our ability to execute this FEED on a fast-track basis incorporating all of the characteristics required to support the award of EPC contracts which are expected in 2023,” said Tareq Kawash, Senior Vice President for Onshore at McDermott.

McDermott was involved in initial phases of Adnoc’s LNG development in the late 1980s that resulted in the Das Island plant in Abu Dhabi, the second-largest emirate after Dubai.

The US company constructed the storage facilities for both LNG and liquified petroleum gas (LPG) on an EPC basis on Das Island.

“We are proud to continue our long history with Adnoc by playing an important role in helping to define the next phase of LNG development in the UAE,” added Kawash.

McDermott noted that it was one of the most experienced engineering and construction firms serving the LNG market and has delivered more than 30 LNG Pre-FEED and FEED projects over the past 10 years.

The Fujairah LNG facilities FEED will be performed by teams in McDermott's offices in London and the UAE.

Intercontinental Exchange, the leading operator of global energy derivative exchanges and clearing houses, has launch its oil future contract for liquefied natural exporter Abu Dhabi and a total of 8,854 cleared lots were traded on the first day.

The start of trading of the ICE Murban Crude Oil Futures (IFAN) had been delayed from 2020 by the market oil market slump and the Covid-19 pandemic.

ICE Murban Crude Oil Futures opened for trading alongside 18 Murban-related cash settled derivatives and inter-commodity spreads, offering the market the broadest range of ways to trade and hedge Murban crude.

Market activity on ICE Futures Abu Dhabi on the first day of trading included 6,344 ICE Murban Crude Oil futures contracts and 2,510 Murban related cash settled derivative contracts.

A total of 27 firms traded on day one of the launch.

Of the cash settled derivatives, 2,500 lots of Murban Singapore Marker 1st Line futures and 10 lots of Murban 1st Line vs Brent 1st Line futures contracts traded.

“The depth of market activity on our first day of trading is extremely encouraging,” said Jamal Oulhadj, President of ICE Futures Abu Dhabi.

“On the first day of launch we saw active trading, consistently tight bid offer spreads, a high number of participants from both the physical and financial sides of the market, and liquidity out for the first six months of the curve,” added Oulhadj.

“The mix of trading across the Murban futures contract and the cash settled derivatives reflects how our customers are already beginning to utilize the extensive range of tools we offer to trade and hedge Murban crude price exposure,” he stated.

ICE points out that Murban futures are open for trading for 24 hours a day on Mondays and 22 hours a day Tuesdays to Fridays, with investors from jurisdictions including the Abu Dhabi Global Market, the US, Singapore, the UK, Switzerland, the Netherlands, France, Norway, Australia, Japan and South Korea, able to trade on IFAD.

IFAD has 26 Exchange Members and 19 Clearing Members, who are listed in full on IFAD’s membership page.

“Contracts traded on IFAD are cleared at ICE Clear Europe where they are cleared alongside ICE’s global energy futures platform covering oil, natural gas and the environmental complex, allowing customers to benefit from critical margin offsets to enhance capital efficiency,” explained ICE.