Oil Giants Seek Stakes in the UAE’s New LNG Export Project

Large international oil and gas companies, including top LNG traders Shell and TotalEnergies, are in discussions to buy stakes in the new LNG export project of the United Arab Emirates (UAE), anonymous sources familiar with the talks told Bloomberg on Tuesday.  

The project, Ruwais LNG, is being developed by the UAE’s state firm ADNOC and is planned to consist of two 4.8 million metric tonnes per annum (mmtpa) LNG liquefaction trains with a total capacity of 9.6 mmtpa. The project is set to more than double ADNOC’s LNG production capacity, from the current sole LNG project at Das Island.

ADNOC signed last month a deal with Germany’s state-controlled firm Securing Energy for Europe (Sefe), under which Abu Dhabi’s national oil company will supply LNG to Germany for 15 years beginning in 2028.

The definitive LNG agreement is contingent upon a final investment decision on the Ruwais LNG project, including regulatory approvals, and the negotiation of a definitive Sales and Purchase Agreement between the two companies.  

The FID on the Ruwais LNG project could happen as early as May, according to Bloomberg’s sources. 

With the FID expected this year, the Ruwais LNG project is set to be the first LNG export facility in the Middle East and North Africa region to run on clean power, making it one of the lowest carbon intensity LNG plants in the world, ADNOC said last month when it issued a Limited Notice to Proceed (LNTP) for early engineering, procurement, and construction (EPC) activities for the project.

ADNOC doesn’t need financial backing from other companies for Ruwais LNG and may decide not to sell stakes in the project, Bloomberg sources note.

The UAE, Saudi Arabia, and Qatar are all pursuing greater roles in the global LNG market, with the Saudis looking for investments overseas and Qatar adding another major LNG expansion project to its two ongoing projects, aiming to raise its total LNG export capacity by 85% from current levels by 2030.   

By Charles Kennedy for Oilprice.com

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