Tuesday, 30 May, 2023

UAE’s ADNOC signs $1bn LNG deal with TotalEnergies

UAE’s ADNOC signs $1bn LNG deal with TotalEnergies

DUBAI: The United Arab Emirates' ADNOC Gas announced Monday a $1-billion deal to provide liquefied natural gas to France's TotalEnergies as Europe scrambles to find alternatives to Russian energy sources.

The liquefied natural gas provided under the three-year supply deal "will be delivered to various export markets around the world", an ADNOC Gas statement said.

The agreement is valued at between $1 billion and $1.2 billion, the statement said, without elaborating on the quantities involved, reports AFP.

"The deal is due to start in 2023 and targets the Asian market as a priority," TotalEnergies told AFP.

The deal was signed with TotalEnergies Gas and Power Limited, a subsidiary of the French multinational.

ADNOC Gas, which only became operational at the start of this year, is a subsidiary of state-owned energy giant Abu Dhabi National Oil Company (ADNOC).

The UAE has emerged as a key partner for Western countries as they scramble to secure energy deals worldwide to replace imports from sanctions-hit Russia following the Kremlin's invasion of Ukraine last year.

In July, a deal between TotalEnergies and ADNOC was signed "for cooperation in the area of energy supplies" during a visit by UAE President Sheikh Mohamed bin Zayed Al-Nahyan to Paris.

In September, the UAE agreed to deliver natural gas and diesel to Germany as part of an "energy security" deal to replace Russian supplies.

The problem was particularly acute for Europe's largest economy, which depended heavily on Russian gas imports.

In 2021, the UAE produced 57 billion cubic metres (bcm) of natural gas, or about 1.4 percent of global output, according to the BP Statistical Review of World Energy.

That same year, the country exported 8.8 bcm of LNG, 1.7 percent of world LNG exports, the Statistical Review said.

The UAE is looking to boost its LNG production capacity to 15 million tons annually in the next few years, according to Bloomberg.