Big Oil to Invest in ADNOC's Largest LNG Project

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Abu Dhabi National Oil Co. (ADNOC) has entered agreements farming out a 40 percent ownership in its largest natural gas liquefaction project to BP PLC, Mitsui & Co. Ltd., Shell PLC and TotalEnergies SE.

The companies separately signed up for a 10 percent interest each in the liquefied natural gas (LNG) export plant in Al Ruwais Industrial City, which is planned to have two trains with a combined production capacity of 9.6 million metric tons per annum (MMtpa), ADNOC said in a statement. The state-owned company will keep a 60 percent ownership of Ruwais LNG if the deals are finalized, subject to regulatory approvals.

Targeted to be put into production 2028, the facility would more than double ADNOC’s LNG output, according to the company. Last year, the United Arab Emirates was the third biggest LNG exporter among Middle Eastern countries, sending out a total of 7.7 billion cubic meters (271.9 billion cubic feet), behind Qatar (first) and Oman (second), according to the Energy Institute’s “Statistical Review of World Energy”.

Ruwais LNG would be the first LNG export facility in the Middle East and North Africa region to run on clean power, according to ADNOC. Last year it awarded a contract for all-electric compression systems for the project to Baker Hughes Co. Ruwais LNG’s two trains will use the United States firm’s 75-megawatt BRUSH electric motor technology, Baker Hughes said in a press release October 4, 2023, about the AED 1.47 billion ($400 million) contract.

Simultaneous with the investment agreements, Shell subsidiary Shell International Trading Middle East Ltd. FZE inked an agreement to buy one MMtpa from the project, according to a separate statement by the British energy giant.

Japan’s Mitsui also simultaneously penned an offtake of 600,000 metric tons a year, ADNOC said.

Ruwais LNG now has offtake pacts for 70 percent of its output capacity, according to ADNOC.

Last June 12 it announced the final investment decision and the award of a $5.5 billion engineering, procurement and construction contract for the project. The contract went to a joint venture by Technip Energies NV, JGC Holdings Corp. and NMDC Energy.

“As natural gas demand continues to increase, this world-class project will enable us to provide more lower-carbon gas to meet growing demand today while helping the world transition to a cleaner energy future”, ADNOC managing director and chief executive Sultan Ahmed Al Jaber said.

BP chief executive Murray Auchinclos commented, “This is a further example of our investment in gas growth in the Middle East as we continue to strengthen our LNG business globally”.

“In line with our strategy to create more value with less emissions, we are investing in additional LNG capacity and further growing our world-leading LNG portfolio, with energy-efficient and carbon-competitive projects”, Shell chief executive Wael Sawan said.

TotalEnergies chief executive Patrick Pouyanné recalled, “Last year at COP28, TotalEnergies and ADNOC both committed to lead the Oil & Gas Decarbonization Charter to reduce the industry’s greenhouse gas emissions”.

“With Ruwais LNG, we are putting this principle into practice with one of the world’s lowest-carbon intensity LNG plants, allowing natural gas to fully play its role of transitional fuel”, Pouyanné said.

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