Abu Dhabi – Mubasher: The Abu Dhabi National Oil Company (ADNOC) on Wednesday signed a deal, in principle, to extend its liquefied natural gas (LNG) supply agreement with ADNOC LNG until 2040.
The deal, which will come into effect starting 1 April 2019, replaces an existing agreement that will expire on 31 March 2019, ADNOC said, adding that the deal was signed in coordination with ADNOC LNG’s joint venture partners, Mitsui, BP, and Total.
ADNOC signed the deal during the Abu Dhabi International Petroleum Conference 2018 (ADIPEC 2018), which commenced on Monday and concludes on Thursday.
“The extension announcement follows the Abu Dhabi’s Supreme Petroleum Council (SPC) approval of ADNOC’s new integrated gas strategy that will sustain LNG production to 2040 and allow ADNOC to seize incremental LNG and gas-to-chemicals growth opportunities where they arise from the UAE’s dynamic demand/supply position and evolving energy mix,” ADNOC said in a statement on Wednesday.
ADNOC’s director of downstream directorate Abdulaziz Alhajri said he expects the LNG market to see robust growth on the back of demand from Asia and developing countries who want access to clean and affordable energy sources.
“With over four decades of experience of the LNG market, ADNOC LNG is well positioned to leverage this opportunity and is now modernising its commercial approach to transition from a single customer to a multi-customer business that includes a number of global utilities as well as portfolio players and traders,” he added during the signing event at ADIPEC.
ADNOC LNG is currently working on diversifying its customer portfolio. Under this strategy, it has signed seven termed contracts to supply over 4.2 million tonnes per annum (mmtpa) of LNG.
It is worth noting that LNG is the “fastest-growing hydrocarbon with a growth rate of 4% per annum, twice that of natural gas,” according to ADNOC, which forecasts that Global LNG demand would exceed 500 million tonnes per annum by 2035, from nearly 300 million tonnes per annum in 2017.
