ADNOC Gas Signs 10-Year LNG Sales and Purchase Agreement with India's Gail
11.15.2024 By Tank Terminals - NEWS

November 15, 2024 [Storage Terminals Magazine]- ADNOC Gas has formalised a 10-year Sales and Purchase Agreement with GAIL India Limited, the largest natural gas company in India, for the supply of up to 0.52 million metric tonnes per annum of liquefied natural gas, commencing in 2026. This definitive SPA solidifies the previous heads of agreement announced in January.

 

The LNG will be sourced from ADNOC Gas’ Das Island liquefaction facility, one of the world’s longest-operating plants, with an annual production capacity of 6.0 mtpa. Since its launch in 1977, the facility has shipped over 3,500 LNG cargoes globally, underscoring its significant role in the international energy market.

Rashid Khalfan Al Mazrouei, senior vice president of marketing at ADNOC Gas, highlighted the strategic importance of the agreement: “This SPA underscores ADNOC Gas’ commitment to being a reliable and responsible supplier of natural gas on a global scale. It aligns with our ambition to seize growth opportunities in the increasing global gas demand and reaffirms our position as a key partner for energy solutions in India.”

Global demand for LNG is expected to climb by 15 percent over the next decade, primarily driven by coal-to-gas transitions in China and expanded LNG use for power generation in Southern and Southeast Asia. ADNOC Gas aims to more than double its LNG production capacity as part of its strategy to capture a greater share of this rising demand for lower-carbon energy solutions.

Sanjay Kumar, director of marketing at GAIL, emphasised the importance of this deal for India’s energy landscape: “India is experiencing heightened LNG demand due to a diverse and expanding natural gas sector. This SPA with ADNOC Gas is pivotal for GAIL, enabling us to expand our long-term LNG portfolio to better cater to our diverse consumer base.”

In furthering its growth strategy, ADNOC Gas has announced its intention to acquire ADNOC’s 60 percent stake in the Ruwais LNG plant by H2 2028, coinciding with the start of first production. The Ruwais LNG plant, featuring two LNG trains with a combined production capacity of 4.8 mtpa each, will be a trailblazer in the Middle East and Africa as the first LNG export facility powered by clean grid electricity, setting a benchmark for low-carbon LNG production.

Leveraging advanced digital technology and artificial intelligence, Ruwais LNG will enhance safety, optimise operations, and minimise emissions. When fully operational in 2029, ADNOC Gas’ total LNG production capacity will exceed 15 mtpa, significantly boosting its global output.

India’s status as the fourth-largest LNG importer globally, coupled with its goal to increase natural gas’s share in its primary energy mix from 6 to 15 percent by 2030, underscores the importance of this SPA. India’s regasification infrastructure has expanded rapidly, doubling from 21 MMTPA in 2014, positioning the nation well to meet its growing LNG needs.

 

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