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ADNOC Gas has signed a long-term agreement to supply liquefied natural gas to Indian Oil Corporation, in a deal worth between $7 billion and $9 billion.
Under the terms of the agreement, ADNOC Gas, the integrated gas unit of Abu Dhabi National Oil Company (ADNOC), will export up to 1.2 million metric tonnes per annum (mmtpa) of LNG to Indian Oil over a period of 14 years, the Abu Dhabi company said in a statement.
ADNOC Gas, which supplies around 60% of the UAE’s sales gas needs and has access to 95% of the UAE’s huge gas reserves, looks to expand its global presence as the LNG market grows and countries look to diversify supply to boost energy security.
“The landmark deal marks another significant milestone for ADNOC Gas as it expands its global reach, reinforcing its position as a global LNG export partner of choice, and reaffirming IOCL as its key strategic partner in the LNG market,” ADNOC Gas said.
India, for its part, aims to boost the share of natural gas in its energy mix to 15% by 2030, up from around 6% now.
Competition for LNG has increased and long-term LNG contracts have returned, after the Russian invasion of Ukraine upended the global gas market, prompted Europe to pledge to ditch Russian pipeline gas by 2027, and kickstarted a competition between Europe and Asia for spot and long-term LNG supply.
The United States and Qatar have recently signed major long-term deals with both Chinese and European firms. Last month Germany signed a 20-year deal with U.S. firm Venture Global LNG to import 2.25 million tons of LNG per year from Venture Global’s third project, CP2 LNG, as Europe’s biggest economy is looking to secure gas supply after Russia stopped deliveries.
Chinese buyers, for their part, have recently signed with Qatar the longest LNG term deals in the history of the industry while also discussing additional agreements with QatarEnergy and with U.S. LNG developers.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.