LNG

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.

TotalEnergies said it expected India’s newest LNG terminal, the onshore Dhamra facility located in the East Coast Indian state of Odisha, to start full commercial operations in May.

Oman LNG, the expanding producer on the Arabian Peninsula, has signed two more supply agreements with TotalEnergies and Thailand’s oil and gas firm PTT for a combined 1.6 million tonnes per annum of cargoes after also signing similar deals recently with three Japanese companies and Shell.

The company said it signed separate deals to supply the Thais and TotalEnergies each with 800,000 tonnes of LNG from 2025.

A statement said the binding term-sheet deals were signed by the Chief Executive of Oman LNG, Hamed Al-Naamany, with the Managing Director of PTT Global LNG, Ratchada Lertwanichwatanam, and with the TotalEnergies Senior Vice President of LNG Thomas Maurisse.

“The signing of the term-sheet agreements with PTT Global LNG and TotalEnergies enhance our efforts to further grow and strengthen our market positions including new business opportunities,” said Oman LNG’s Al-Naamany.

“Such a step complements our mission to add value to the local economy through increasing capacity, and strengthening collaborations with international firms,” he added.

The 10-year supply deal with TotalEnergies is scheduled to begin in 2025, while Thailand’s shipments begin a year later in 2026.

Japan deals

Oman LNG last month signed similar deals with top Japanese electricity generator JERA, and trading houses Mitsui & Co and Itochu Corp, to supply a combined 2.35 million tonnes per year, starting in 2025, for up to 10 years.

JERA confirmed its deal on December 27 and it was in the form of a preliminary term sheet that could lead to a Sales and Purchase Agreement.

The deal for JERA is for up to 12 cargoes per year from 2025. JERA noted that LNG procurement competition had been intensifying and stable procurement of fuel in a timely manner was necessary to secure a stable supply of energy in Japan.

The Japanese deals were on a free-on-board (FOB) basis, using their own ships, which they would regard as more flexible.

Oman LNG signed a similar deal - making six in total in the past two months - with Shell International Trading for 800,000 tonnes per annum for 10 years from 2025. 

The French major TotalEnergies has signed an agreement with Sempra Infrastructure of the US and the other partners in the Cameron LNG plant in Louisiana for the development of the Hackberry Carbon Sequestration (HCS) project in Cameron Parish.

The other signatories to the deal are Japanese trading houses Mitsui & Co. and Mitsubishi Corp.

TotalEnergies said the HCS project was primarily designed for capture, transportation, and storage of carbon dioxide (CO2) from Cameron LNG.

“The CO2 will be captured by the acid gas removal units, dehydrated, compressed, and transported by pipeline about 10 kilometres away,” the French company explained.

“It will then be permanently stored in a saline aquifer using an injection well with a capacity of up to 2 million tons of CO2 per year,” added TotalEnergies.

Permits

The HCS project filed an application in August 2021 with the US Environmental Protection Agency (EPA) for the construction permit of such an injection well and was the first accepted by the EPA in Louisiana.

“We are pleased to join forces with our partners to significantly reduce CO2 emissions at the Cameron LNG export terminal, thus enabling us to supply our customers with low-carbon LNG,” said Thomas Maurisse, Senior Vice President LNG at TotalEnergies.

Justin Bird, Chief Executive of Sempra Infrastructure, which operates the Cameron plant and holds the assets of two LNG export projcts in Mexico and at Port Arthur in Texas, said the company was pleased to be advancing the development of the Hackberry CO2 project.

“This project is expected to be among the first North America carbon-capture facilities designed to receive and store CO2 from multiple sources,” added Bird.

TotalEnergies noted that development of the Hackberry project remained subject to definitive agreements, obtaining all the necessary permits and with all partners reaching a final investment decision.

Expansion

Cameron LNG is also the subject of an expansion in the form of a single Train with a production capacity of around 6.75 million tonnes per annum, taking capacity over 20 MTPA.

The plant will also be subject to a debottlenecking process to increase the efficiency and output of the existing three liquefaction Trains.

Sempra has also now put the Port Arthur project in Texas back on the fast track route to development.

The proposed Port Arthur plant has all its regulatory permits and will be constructed on a 3,000-acre site in Jefferson County in Texas and with an initial 13.5 MTPA of production.

French energy company Total along with South Korean shipbuilder Hyundai Heavy Industries and Russian fleet operator Sovcomflot have concluded a deal with options as the build-out continues on the next generation of LNG vessels.

As part of the global fleet expansion, Sovcomflot and Total have concluded a time-charter agreement for up to seven years for a newbuilding LNG carrier with capacity of 174,000 cubic metres to be owned and operated by Sovcomflot, with options for up to two additional vessels.

A Web conference was held to mark the event attended by Igor Tonkovidov, President and Chief Executive Sovcomflot, Thomas Maurisse, Senior Vice President for LNG at Total and Seong-Yong Park, Senior Executive Vice President and Chief Operating Officer at HHI.

The new vessel will be the latest in a series of SCF’s new-generation conventional Atlanticmax LNG carriers, with three sister ships already in operation, the “SCF La Perouse”, the “SCF Barents” and the “SCF Timmerman”.

“The vessel will be fitted with an X-DF propulsion system, operated by a slow-speed diesel engine with a direct drive to the propellers, which will enable a substantial reduction in the vessel’s fuel consumption when compared with previous generations of LNG carriers,” the companies explained.

“The new carrier will also be fitted with a hull air lubrication system which, combined with two shaft power generators with frequency-to-current converters, is expected to deliver a further significant decrease in fuel consumption and greenhouse-gas emissions,” they added.

Another environmental feature of this series of new-generation LNG vessels is a partial re-liquefaction system, which allows cargo boil-off gas to be returned to the tanks.

Delivery of the carrier to the charterer is scheduled for the third quarter of 2023.

“We are pleased that SCF Group’s shipbuilding programme will be supplemented with a new gas carrier that meets all the current international standards regarding environmental protection, as well as the Charterer's requirements for energy efficiency, quality and navigational safety,” said Sovcomflot’s Tonkovidov.

“We are grateful to our valued partners at Total for the opportunity to participate in this interesting project which extends further our cooperation in LNG transportation with one of the world’s leading international energy companies,” added Tonkovidov.

“The success in Total’s project tender once again demonstrates SCF’s high standards and capabilities in LNG shipping as well as with other types of energy,” stated the Russian company’s CEO.

He added that the continued development of energy transportation services that serve long-term projects provide a fixed return element to the shipping line’s business model.

“It is in line with the corporate strategy approved by our shareholders and allows us to reduce the negative impact of conventional tanker freight market fluctuations on the Company’s results,” Tonkovidov concluded.

The Russian shipping line is now listed on the Moscow stock exchange after an initial public offering in October 2020. 

Abu Dhabi National Oil Company’s LNG unit has signed a supply agreement with global commodities company Vitol for the sale of 1.8 million tonnes per annum of cargoes for six years and another two-year deal with French major Total for 750,000 tonnes.