UAE’s ADNOC Signs $1 Bn LNG Deal With TotalEnergies

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Summary

The French company TotalEnergies, has entered into a three-year agreement with ADNOC Gas, an Emirati gas company, for a value of $1 billion. The agreement was signed on May 1st.ADNOC Gas, a subsidiary of Abu Dhabi National Oil Company (ADNOC), an Emirati gas company, has recently announced a noteworthy agreement with TotalEnergies, a French company, to supply liquefied natural gas (LNG). This agreement, which is valid for three years, is valued at 1 to 1.2 billion dollars (between 900 million and 1 billion euros) and represents an effort by European countries to diversify their suppliers and reduce their reliance on Russia. In a statement, ADNOC Gas confirmed that the Emirati LNG would be delivered to various export markets worldwide, although the volumes to be supplied were not disclosed. The agreement was signed with TotalEnergies Gas and its subsidiary Power Limited. The announcement was made on May 1, 2023.

Liquefied natural gas as an alternative to Russian gas

In July 2022, a cooperation agreement in the energy supply sector was signed between the French multinational and ADNOC during a visit to Paris by the President of the United Arab Emirates, Sheikh Mohamed bin Zayed al-Nahyan. The UAE also announced in September that it would supply Germany with natural gas and diesel as part of an agreement on energy security. European countries are increasingly relying on liquefied natural gas as an alternative to Russia n gas, following the Russian invasion of Ukraine. This is a particularly sensitive issue for Germany, as half of its gas imports are sourced from Russia.

Prior to the Ukrainian conflict triggered by the Russian invasion in February 2022, France imported nearly 17% of its natural gas from Russia, according to the Ministry of Ecological Transition. In 2021, the United Arab Emirates produced 57 billion cubic meters of natural gas, or about 1.4% of global production, according to BP Statistical Review of World Energy. The same year, according to the same source, the UAE produced 8.8 billion cubic meters of liquefied natural gas, or 1.7% of global exports. The country hopes to reach an annual production of 15 million tons in the coming years, according to Bloomberg News agency.

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