Abu Dhabi National Oil Company (ADNOC) has announced that it will award a 40% stake in its Ruwais liquefied natural gas (LNG) project to four major energy players: Shell, TotalEnergies, BP and Mitsui. Each company will hold a 10% share, according to sources close to the matter. The project aims to significantly increase LNG production in the United Arab Emirates, with a planned capacity of 9.6 million metric tons per annum (mtpa) by the end of 2028.
Strategic Partnerships for Growth
The importance of this project is crucial for ADNOC, which sees natural gas and LNG as key pillars of its future growth, alongside renewable energies and petrochemicals. In addition, ADNOC, in collaboration with Technip Energies, aims to produce low-carbon LNG. ADNOC currently produces around 6 mtpa of LNG, and is aiming to increase this capacity to 15 mtpa. This initiative is part of a wider strategy in which Gulf countries are seeking to capitalize on increased global demand for natural gas, exacerbated by Russia’s invasion of Ukraine.
Discussions on the distribution of shares also show that ADNOC plans to reserve an additional 5% stake for another partner, the details of which have yet to be specified. In addition, ADNOC has allocated 2 mtpa to shareholders at a below-market price but with less flexibility, according to sources.
Market Impacts and Opportunities
This project is particularly strategic for Shell and TotalEnergies, who are seeking to strengthen their positions in the LNG trade between the Middle East and Asia. The Ruwais infrastructure will thus become the first LNG export facility in the region to run on clean energy, a major asset in the current context of energy transition.
In addition, ADNOC has already signed supply agreements with several leading companies, including Germany’s EnBW, Securing Energy for Europe (SEFE) and China’s ENN Natural Gas. These partnerships reflect a growing trend among Gulf energy companies to diversify their markets and strengthen their global presence.
Future prospects and challenges
The final investment decision for this project was taken in June, marking a decisive step for ADNOC in its ambitions to become a world leader in LNG. This project could also encourage other Gulf countries to accelerate their own LNG expansions, as witnessed by the recent expansion of Qatar’s North Field project.
However, the challenges remain numerous. Market price fluctuations and geopolitical tensions are important variables that could influence the economic viability of the project. What’s more, increased competition between LNG producers around the world requires ongoing adaptation of business strategies and partnerships.
The award of shares in the Ruwais LNG project to Shell, TotalEnergies, BP and Mitsui represents a significant step forward for ADNOC and a major growth opportunity for the natural gas sector in the United Arab Emirates. This initiative, aligned with a vision of energy transition and economic diversification, could well redefine the dynamics of the global LNG market.
