Adnoc Signs LNG and Ammonia Supply Deals With German Players
11.29.2022 By Ella Keskin - NEWS

November 29, 2022 [New Atlas] – UAE and Germany also signed a new Energy Security and Industry Accelerator Agreement that will accelerate projects of joint interest

 

Abu Dhabi National Oil company (Adnoc) has signed agreements with German companies for the supply of liquefied natural gas and low carbon ammonia, as the European nation aims to phase out Russian gas imports in the coming years.

As part of the agreement, Adnoc is to supply an cargo for delivery in late 2022 to be used in the commissioning of German company RWE’s floating LNG import terminal at Brunsbuttel, according to United Arab Emirates’ official news agency WAM.

Adnoc has also reserved further LNG cargos exclusively for German customers next year, the agency noted.

Upstream recently reported that Germany is poised to sign LNG import deals with the UAE, as it moves to replace its Russian gas imports by 2024.

RWE also confirmed the development and said the cargo “is expected to be shipped from Das Island, Abu Dhabi, and to arrive in Germany in late December 2022”.

“The cargo delivered by Adnoc will be for 137,000 cubic metres of LNG and will be the first LNG to be supplied to the German gas market via the floating LNG import terminal at Brunsbuttel,” it said.

Key milestone

RWE said the deal “marks an important milestone in building up an LNG supply infrastructure in Germany and setting up a more diversified gas supply”.

And the company added that the two companies have also signed a Memorandum of Understanding on multi-year LNG supplies, with cargoes starting to be delivered to Germany from 2023.

“LNG supplies from Adnoc can be delivered to Germany through either floating or land-based regasification terminals as these become operational,” RWE said.

Adnoc is building its Fujairah LNG export terminal in the UAE and is also expanding its upstream capacity on the back of the multi billion-dollar Hail & Ghasha sour gas development.

The emirati giant is likely to emerge as a major gas exporter in the next three to four years, targeting Asia and Europe as its key markets, market sources claimed.

Ammonia supply deal

In addition to the LNG deal, Adnoc entered into a number of agreements with German customers including Steag and Aurubis for demonstration cargos of low-carbon ammonia, a carrier fuel for hydrogen.

“The first of these cargoes arrived in Hamburg earlier this month,” WAM noted.

Germany and the UAE signed a new Energy Security & Industry Accelerator (ESIA) Agreement focusing on projects of joint interest between the two nations in energy security, decarbonisation and climate action.

“Under the proposed ESIA, both countries anticipate exploring further opportunities to accelerate growth and collaboration across the hydrogen value chain,” WAM added.

UAE’s Green energy giant Masdar also signed a deal with RWE to jointly explore opportunities in the offshore wind markets in the North Sea and Baltic Sea that could generate up to 10gigawatts of renewable energy production capacity by 2030.

Russian gas

In 2021, Russia accounted for 55% of Germany’s gas imports, a level that had declined to 26% by the end of June 2022, due to significantly reduced flows via the Nord Stream 1 pipeline, which is operating at just 20% of capacity, according to a recent report by the World Economic Forum.

Germany has taken several steps to reduce dependence on Russian gas in the short-to-medium term and has already leased or bought five floating storage and regasification units to quickly start importing LNG.

Two of the FSRUs will be stationed in Wilhelmshaven and Brunsbuettel and will be able to handle up to 12.5 billion cubic metres per annum.

Germany is also in talks with Qatar and Canada, among others, to increase LNG imports in the medium term.

Qatar deals

German utilities RWE and Uniper are also negotiating potential terms for long-term deals with Qatar to buy LNG from the country’s North Field Expansion project, Reuters reported, quoting anonymous sources.

Other European nations are also looking to the Middle East for LNG as they aim to phase out Russian gas supplies.

The UAE and France in July signed strategic energy co-operation deals that aims to ensure oil and gas supplies from the Middle East nation and to increase co-operation on hydrogen, renewables and nuclear projects.

The first agreement involved a comprehensive strategic energy partnership between the two nations, while the second was a strategic partnership between Adnoc and French giant TotalEnergies.


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