ADNOC to supply India with LNG until 2036

ADNOC Gas, a subsidiary of Abu Dhabi National Oil Company (ADNOC), has signed a ten-year liquefied natural gas (LNG) sales and purchase agreement (SPA) with India’s state-owned natural gas player GAIL.

The deal with what the UAE player says is India’s largest natural gas company entails the supply of up to 0.52 million metric tonnes per annum (mmtpa) of LNG, starting in 2026. The SPA represents the formalization of a previous heads of agreement (HOA) between the two players announced in January.

The gas will be supplied from ADNOC Gas’ Das Island liquefaction facility, which has an LNG production capacity of 6 mtpa and is described by the UAE player as the third longest-established LNG plant still in production globally, in operation since 1977.

Rashid Khalfan Al Mazrouei, ADNOC Gas Senior Vice President of Marketing, said: “Global LNG demand is expected to rise by 15% over the next decade, driven by industrial coal-to-gas switching in China and the increased use of LNG for power generation across Southern and Southeast Asia. We are committed to more than doubling our LNG production capacity as part of our strategy to capture a larger share of the growing global demand for lower carbon intensity products like ours.”

As reported by the UAE giant, India ranked as the fourth-largest importer of LNG globally in 2023, expecting to further increase its LNG imports over the next decade. The agreement is said to be in line with the South Asian country’s objective to increase the share of natural gas in its total primary energy mix to 15% by 2030, more than doubling the current 6%. The capacity of India’s LNG regasification infrastructure also doubled last year, rising from 21 mmtpa in 2014.

“India is witnessing a growing demand for LNG to meet its increasing natural gas demand in a diversified sectoral pattern. GAIL plans to significantly increase its term LNG portfolio in the coming years to meet this rising demand. This SPA with ADNOC Gas is a crucial step in this direction, enabling GAIL to augment its existing LNG portfolio to better serve its diverse consumer base,” noted Sanjay Kumar, Marketing Director at GAIL. 

Earlier this week, ADNOC Gas disclosed the intention to acquire its parent company’s 60% stake in the Ruwais LNG plant in the second quarter of 2028 when the first production is due. The takeover is expected to support the international growth ambitions of ADNOC’s subsidiary established in early 2023. 

The UAE firm is already managing the construction and design of Ruwais LNG in Al Ruwais Industrial City, Abu Dhabi, and leading the marketing of its LNG volumes. The project will comprise two 4.8 mmtpa LNG liquefaction trains with a total capacity of 9.6 mmtpa. The final investment decision for the project was taken in July 2024.

Once the plant is fully operational in 2029, ADNOC Gas’ operated LNG production capacity is expected to more than double to over 15 mmtpa. The development is described as the first LNG export facility in the Middle East and North Africa (MENA) region to run on clean grid electricity, making it one of the lowest-carbon intensity LNG plants in the world.