Adnoc inks supply agreement with Japan’s Osaka Gas for Ruwais LNG

Another offtake agreement for Ruwais LNG project: Abu Dhabi National Oil Company (Adnoc) has inked a long-term Heads of Agreement with Japan’s Osaka Gas for the supply of up to 0.8 mn mmpta of liquefied natural gas (LNG) for the Ruwais LNG project, according to a press release (pdf). According to the agreement — a first between Adnoc and Osaka Gas — delivery will start in the late 2020s. No financial details on the agreement were disclosed.

The details: The LNG will primarily be sourced from Adnoc’s Ruwais LNG project, after which it will be transferred to the destination ports of Osaka Gas and its Singapore-based subsidiary Osaka Gas Energy Supply and Trading Pte. Ltd. The two firms will finalize a detailed sale and purchase agreement in the coming months.

Why is this important? The contract will significantly enhance the stability of Osaka Gas’ LNG procurement and strengthen its goals to deliver lower carbon energy and accelerate its net zero target. The agreement is one of Adnoc’s several LNG sales commitments, which account for 70%of the project’s total production capacity.

More on Ruwais LNG: Ruwais is angling to become the one of the lowest-carbon intensity LNG projects in the world. Ruwais LNG consists of two 4.8 mmtpa LNG liquefaction trains with a combined 9.6 mmtpa capacity, which will more than double Adnoc’s LNG output to 15 mmtpa once Ruwais LNG comes online. The project is slated to become operational in 2028.

The fourth in a string of agreements: The firm secured a 15-year LNG supply agreement back in May with German energy giant Energie Baden-Württemberg to supply it with 0.6 mn tons of LNG per year. This marked the third long-term supply agreement for the Ruwais Project, with Adnoc inking similar 15-year agreements with China's ENN Natural Gas and SEFE Marketing & Trading Singapore to deliver to each some 1 mn tons of LNG annually from the new plant.

And ships are being lined up: Adnoc is set to receive AED 9.4 bn LNG ships from South Korean shipbuilders to build LNG carriers in a transaction valued at ED 9.4 bn (USD 2.5 bn). The newbuild is expected to service Adnoc’s second LNG terminal at Ruwais.

About Osaka Gas: Osaka Gas is one of Japan’s biggest LNG players, handling 11.5 mn tons of fuel in the FY ending 31 March, including 6.12 mn tons for its own consumption, according to Reuters. The outfit aims to reduce carbon emissions by 2050 in line with its Carbon Neutral Vision 2021 and Energy Transition 2030 goals.