ADNOC LNG signs long-term LNG supply agreements

ADNOC LNG has signed up to a six-year supply agreement with Vitol, the world’s largest independent energy trader, for the sale of 1.8mn t/y of post-2022 LNG volumes and a two-year supply agreement with Total for 0.75mn t/y of 2021 and 2022 LNG volumes.

The new agreements represent a continuation of the relationship ADNOC has built with Vitol and Total, including, most recently, ADNOC and Vitol’s 2019 investment partnership in global storage terminal owner and operator VTTI.

LNG global demand is currently projected to grow by up to 5%/y over the next 20 years, reports ADNOC LNG. Much of this market confidence is due to LNG being produced from natural gas, the cleanest fossil fuel, which can contribute to better air quality and lower greenhouse gas (GHG) emissions in the power sector. This makes LNG ideal for the transition to a low carbon energy future, supporting a pragmatic mix of fuels that can help countries balance energy demand with their clean energy goals, says the company.

With the global oil and gas industry facing unprecedented challenges in 2020, ADNOC LNG’s strategy has enabled the company to respond quickly to changing market conditions. As well as developing new markets, it has rapidly shifted from one customer to multiple customers. The agreements with Vitol and Total continue the transition to a multi-customer strategy that began in 2019. Since then, ADNOC LNG has shifted from supplying 90% of its LNG to a single customer in Japan, which remains an important customer, to supplying 90% of its LNG to a range of clients, and in more than eight countries from across Southern and Southeast Asia.

ADNOC LNG produces about 6mn t/y of LNG from its facilities on Das Island off the coast of Abu Dhabi.

The company is owned by ADNOC (70%), with Mitsui & Co (15%), BP (10%), and Total (5%) comprising the remaining shareholders.