The Abu Dhabi National Oil Company (ADNOC), has agreed, in principle, to extend its gas supply agreement with ADNOC LNG to 2040, in coordination with ADNOC LNG’s joint venture partners, Mitsui, BP and Total.
The new gas supply agreement is scheduled to take effect from April 1, 2019, replacing an existing agreement, due to expire on March 31, 2019.
The extension 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 demand/supply position and energy mix.
Speaking of the agreement, Abdulaziz Alhajri , director of ADNOC’s downstream directorate said that the LNG market is projected to grow at a robust pace, fueled by demand from Asia and developing countries.
As it moves to diversify its customer portfolio, ADNOC LNG has signed seven term contracts for the supply of more than 4.2 million tonnes per annum (mmtpa) of liquefied natural gas (LNG).
The contracts, that cover the supply of LNG on a mid-term basis starting April 2019, have been signed with various international LNG buyers, including Japan’s JERA that plans to purchase up to 8 cargoes per annum of LNG from ADNOC LNG, for a period of three years starting April 2019.
Meanwhile, discussions continue with other potential customers as ADNOC seeks to capitalize on the forecast mid to long-term demand for energy, particularly in the growth markets of Asia.