The biggest supplier of liquefied natural gas in the United Arab Emirates sees strong demand for the fuel through the rest of the decade just as it boosts supply.
Adnoc Gas Plc, a unit of Abu Dhabi National Oil Co, raised its capital expenditure plan to about $15bn over the next five years from about $13bn earlier, according to a statement Monday. It’s expanding processing capacity at home by taking control of a coastal LNG plant from its parent company once construction is completed.
“Our LNG business is growing on the back of demand that we see,” Chief Financial Officer Peter van Driel said in a Bloomberg Television interview. Supply will follow increasing demand “in particular into the east and Asia.”
Middle Eastern oil companies have been ramping up gas projects as they see the fuel as a key bridge in the transition to cleaner energy. Adnoc is building the multibillion-dollar Ruwais LNG project and has taken stakes in export facilities in the US and Africa.
Saudi Arabia aims to boost gas production by 60% this decade while Qatar is in the middle of a massive LNG expansion.
“We don’t see” any glut in supply that could hurt sales, van Driel said. Adnoc Gas can sell either into Europe or Asia, and expects to sign new firm contracts for LNG supply from the 9.6 million-tonne-a-year Ruwais facility, he said, without providing a time frame for deals.
Adnoc last week signed a definitive agreement with Germany’s SEFE to sell 1mn tonnes annually for 15 years from the project.
The agreement converts a preliminary deal signed in March to a definitive sales agreement, Adnoc said in a statement. Adnoc will supply the fuel from an LNG export facility it’s building in Ruwais near Abu Dhabi.
Germany has acknowledged that gas will play a key role in its energy mix.
Adnoc Gas’s higher investment plan doesn’t including two potential gas expansion projects that it has yet to decide whether to implement, van Driel said.
The company is set to take 60% in the Ruwais plant in 2028 from its parent Adnoc for about $5bn. Preliminary and firm agreements for 75% of capacity have been signed, and the company will leave 15% to 20% of the gas for sale on the spot market, he said.
Adnoc Gas, a unit of Abu Dhabi National Oil Co, raised its capital expenditure plan to about $15bn over the next five years from about $13bn earlier, according to a statement Monday.
