Adnoc Gas, estimated to have the seventh largest gas reserves globally, has signed an agreement to supply liquefied natural gas worth $450 million to $550 million to a subsidiary of state-owned energy giant PetroChina.
The agreement highlights the company's growing global presence, particularly in the East and South Asian markets, the company said on Thursday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
“We are pleased to sign this LNG supply agreement with PCI [PetroChina International Company], further strengthening our presence in one of the world’s fastest growing gas markets," said Ahmed Alebri, chief executive of Adnoc Gas.
Adnoc Gas, which has access to 95 per cent of the UAE's natural gas reserves, supplies more than 60 per cent of the country's needs. It has also been focusing on exports amid a rise in demand for LNG.
Last month, it signed a five-year LNG supply agreement with Japan Petroleum Exploration Co (Japex), also valued at between $450 million and $550 million.
In July, the Adnoc subsidiary announced a 14-year supply agreement with Indian Oil Corporation Limited, the South Asian country’s largest refiner.
Adnoc Gas will supply up to 1.2 million tonnes per annum of LNG to IOCL as part of the deal, which is valued at between $7 billion and $9 billion.
Competition for LNG has increased since Russia's invasion of Ukraine last year, with Europe importing record volumes of the supercooled fuel to replace Moscow's gas supplies.
Global LNG trade hit a high of $450 billion in 2022 amid a surge in European demand, according to the International Energy Agency.
“Energy is an important area of collaboration between China and the UAE. We are delighted to partner with Adnoc Gas, a company committed to providing stable and reliable energy supply with low-carbon emissions," said Wu Junli, chairman of PCI.
"This agreement signifies an extension of the co-operation between our two companies and reaffirms PCI’s commitment to Adnoc Gas as our global partner.”
After becoming the world’s largest LNG importer in 2021, China’s imports of the supercooled fuel fell by 20 per cent last year amid lower demand and high spot prices.
The International Energy Agency expects gas demand in China to increase by more than 6 per cent this year, supported by a recovery in economic activity.
China, the world’s second-largest economy and top crude importer, reopened its borders earlier this year after adhering to a strict zero-Covid policy for nearly three years.
In June, QatarEnergy signed its second major natural gas supply deal with the Asian country in less than a year, with the state-owned energy company and China National Petroleum Corporation entering into a 27-year agreement for the delivery of four million tonnes of LNG per year.
CNPC also said it would pick up a stake in the eastern expansion of Qatar's North Field LNG project, one of the world’s largest gas fields.
Last month, Adnoc Gas said it expected robust long-term demand growth for natural gas after recording a drop in first-half profit on lower gas prices.
The company reported an annual 12 per cent fall in net profit for the six months to the end of June to $2.25 billion. Adnoc Gas's first-half revenue fell to $10.62 billion from $13.28 billion a year earlier.