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ADNOC Reserves 40% of Ruwais LNG for Shell, TotalEnergies, BP, and Mitsui

ADNOC has awarded a 40% share of its Ruwais LNG project to Shell, TotalEnergies, BP, and Mitsui, aiming to double production by 2028. The Abu Dhabi National Oil Company (ADNOC) announced that each of these major energy players will hold a 10% stake in the project.

The goal is to significantly increase LNG production in the United Arab Emirates, targeting a capacity of 9.6 million metric tons per annum (mtpa) by the end of 2028.

Strategic Partnerships for Growth

This project is crucial for ADNOC, which views natural gas and LNG as key pillars of its future growth, alongside renewable energies and petrochemicals. In collaboration with Technip Energies, ADNOC aims to produce low-carbon LNG. Currently, ADNOC produces around 6 mtpa of LNG and plans to increase this capacity to 15 mtpa. This initiative is part of a broader strategy by Gulf countries to capitalize on increased global demand for natural gas, exacerbated by Russia’s invasion of Ukraine.

ADNOC also plans to reserve an additional 5% stake for another partner, yet to be specified. Additionally, ADNOC has allocated 2 mtpa to shareholders at a below-market price but with less flexibility, according to sources.

Market Impacts and Opportunities

This project is particularly strategic for Shell and TotalEnergies, who are seeking to strengthen their positions in the LNG trade between the Middle East and Asia. The Ruwais infrastructure will become the first LNG export facility in the region to run on clean energy, a major asset in the current context of energy transition.

ADNOC has already signed supply agreements with several leading companies, including Germany’s EnBW, Securing Energy for Europe (SEFE), and China’s ENN Natural Gas. These partnerships reflect a growing trend among Gulf energy companies to diversify their markets and strengthen their global presence.

Future Prospects and Challenges

The final investment decision for this project was made in June, marking a decisive step for ADNOC in its ambitions to become a world leader in LNG. This project could also encourage other Gulf countries to accelerate their own LNG expansions, as seen with the recent expansion of Qatar’s North Field project.

However, challenges remain numerous. Market price fluctuations and geopolitical tensions are important variables that could influence the economic viability of the project. Increased competition among LNG producers worldwide requires ongoing adaptation of business strategies and partnerships.

The award of shares in the Ruwais LNG project to Shell, TotalEnergies, BP, and Mitsui represents a significant step forward for ADNOC and a major growth opportunity for the natural gas sector in the United Arab Emirates. This initiative, aligned with a vision of energy transition and economic diversification, could well redefine the dynamics of the global LNG market.

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