ADNOC LNG Signs Long-Term LNG Supply Agreements with Vitol and Total, Placing Majority of LNG Volumes through Q1 2022
Supply agreements further ADNOC LNG’s ongoing expansion into new LNG export markets
Transactions reflect ADNOC LNG’s position as LNG export partner of choice
Deals advance ADNOC Group’s 2030 gas strategy, delivering value for the UAE and meeting rising global demand for critical transition fuel
Abu Dhabi, UAE, November 11th, 2020: ADNOC LNG has signed up to a six-year supply agreement with Vitol, the world’s largest independent energy trader, for the sale of 1.8 million tons per annum (mtpa) of post-2022 LNG volumes and a two-year supply agreement with Total for 0.75 mtpa of 2021 and 2022 LNG volumes.
These new agreements represent a continuation of the trusted relationship ADNOC has built with Vitol and Total, including, most recently, ADNOC and Vitol’s 2019 investment partnership in global storage terminal owner and operator VTTI. In the same vein, Total has operated in the United Arab Emirates for more than 80 years and remains one of ADNOC’s most long-standing international partners, with a number of ownership interests across the Group.
Speaking at the Abu Dhabi International Petroleum Exhibition and Convention (ADIPEC), Fatema Al Nuaimi, CEO of ADNOC LNG, said: “We are pleased to partner with both Vitol and Total on these major deals as they will create reliable, long-term benefits for our company and shareholders. Through collaboration and by adopting a partnership approach, we are driving new growth opportunities for ADNOC and are maximizing the value of our nation’s resources.”
“These agreements demonstrate the success of our commercial strategy in unprecedented times and confirm the market’s growing confidence in demand for natural gas. LNG is a fuel that can support the transition to clean energy, especially in many Asian markets where switching to gas will result in significant environmental gains. As a customer-focused business, we will continue to meet the growing demand for LNG as a key fuel in both today’s energy mix and looking ahead to the future.”
LNG global demand is currently projected to grow by up to 5% annually over the next 20 years. Much of this market confidence is due to LNG being produced from natural gas, the cleanest fossil fuel, which can contribute to better air quality and lower GHG emissions in the power sector. This makes LNG ideal for the transition to a low-carbon energy future, supporting a pragmatic mix of fuels that can help countries balance energy demand with their clean energy goals.
Pablo Galante Escobar, Vitol’s Head of LNG, said: “We are proud to conclude another significant milestone with ADNOC, an important partner across key business areas. For Vitol LNG, this most recent development strengthens our ability to ensure diverse and secure supply to our customers around the world.”
Thomas Maurisse, Total’s SVP LNG, added: “This new supply agreement contributes to the growth and flexibility of Total’s LNG portfolio and strengthens our long-standing relationship with ADNOC LNG.”
As the first LNG exporter in the Middle East, ADNOC LNG has been a reliable supplier of gas to global markets for over four decades.
With the global oil and gas industry facing unprecedented challenges in 2020, ADNOC LNG’s strategy has enabled the company to respond quickly to changing market conditions. As well as developing new markets, ADNOC LNG has rapidly shifted from one customer to multiple customers. The agreements with Vitol and TOTAL continue the transition to a multi-customer strategy that began in 2019. Since then, ADNOC LNG has shifted from supplying 90% of its LNG to a single customer in Japan, which remains an important customer, to supplying 90% of its LNG to a range of clients, and in more than eight countries from across Southern and Southeast Asia.
ADNOC LNG produces about 6 mtpa of LNG from its facilities on Das Island off the coast of Abu Dhabi and is one of the world’s most reliable producers of the supercooled, liquefied gas.
The company is owned by ADNOC (70%), with Mitsui & Co (15%), BP (10%), and Total (5%) comprising the remaining shareholders.