ADNOC Signed a 10-Year LNG Contract with Hindustan Petroleum

ADNOC signed a 10-year agreement with Hindustan Petroleum to deliver 500,000 metric tonnes of liquefied natural gas annually.

Abu Dhabi National Oil Company (ADNOC) signed agreements with Hindustan Petroleum Corp Limited (HPCL), India’s largest state-run oil company, this week to buy liquefied natural gas (LNG) as the world’s most populous country seeks to secure long-term supplies to meet its growing energy needs.

Abu Dhabi’s ADNOC signed a 10-year agreement with Hindustan Petroleum to deliver 500,000 metric tonnes of liquefied natural gas annually, to increase its presence in key Asian energy markets.

According to the agreement, the company will supply LNG from its ADNOC Gas’ Das Island liquefaction project, which can produce 6 million metric tons of LNG annually.

The agreement highlights India’s plan to double its share of gas in its energy mix by the end of the decade, despite infrastructure bottlenecks limiting its expansion. ADNOC is taking another step to secure long-term clients for its LNG export capacity, after having signed a legally binding agreement with companies from Germany to Malaysia.

Some traders involved in the agreement state that ADNOC has been more flexible and has lowered its prices compared to its Gulf neighbors. ADNOC is competing with Qatar to find LNG buyers. However, buyers, including those from India, are increasingly considering supply from the US. Companies seek to maintain a favorable relationship with President Donald Trump.

The United Arab Emirates is increasing its annual LNG export capacity from 5.8 million tons to 15.4 million tons, with the first shipment from the new plant at Ruwais scheduled for 2028. By 2030, Qatar plans to increase its capacity from 77 million tons annually to 142 million tons.

Separately, Bharat Petroleum will also sign an optional term contract with Petrobras of Brazil this week to buy 6 million barrels of crude, as per the government release.

The deal also strengthens ADNOC Gas’ partnership with significant Indian businesses, building on a previous agreement with the Indian Oil and Gas Authority of India Limited (GAIL) to support the country’s energy security.

ADNOC Gas Chief Executive Officer Fatema Al-Nuaimi stated that the long-term agreement with HPCL marks the third agreement with an Indian company in the past year, reflecting a robust energy partnership between the UAE and India.

She continued that this milestone demonstrates ADNOC Gas’ capacity to reliably meet the growing demand for LNG worldwide and help India achieve its goal of increasing natural gas to 15% as its primary energy source by 2030.

The Das Island facility is one of the world’s oldest LNG plants. It has shipped over 3500 cargoes since it started its operations.

ADNOC Gas is a key player in its strategy to expand its natural gas production capacity and increase LNG exports globally.

In April 2024, the company announced its plans to invest $13 billion through 2029 to increase its LNG production both locally and internationally.

The oil company signed a 14-year contract with Indian Oil, valued at $7 to $9 billion, to deliver up to 1.2 million tons of oil annually. This deal followed a 10-year contract with GAIL in January 2024 and a 15-year contract with Indian Oil in September 2024, both for 1 million tonnes per year.

In a separate announcement, ADNOC Gas and its subsidiary have awarded $5 billion in contracts for the first phase of their Rich Gas Development (RGD) Project, marking a Final Investment Decision (FID) and their largest-ever capital investment.

The project aimed to create new gas reservoirs, increase liquid gas exports, help the UAE achieve self-sufficiency in gas production, and supply the growing petrochemical industry. Phase 1 includes Engineering, Procurement, and Construction Management (EPCM) contracts worth $2.8 billion, given to Wood for Habshan, $1.2 billion to a consortium led by Petrofac for Das Island, and $1.1 billion to a consortium led by Kent Plc for Asab and Buhasa.