Abu Dhabi, UAE–ADNOC Gas today announced a 14-year supply agreement with Indian Oil Corporation Ltd (IOCL) for the export of up to 1.2 million metric tonnes per annum (mmtpa) of liquefied natural gas (LNG) to India’s largest integrated and diversified energy company.
The agreement, valued in the range of US$7 billion to US$9 billion (AED25.7 to AED33 billion) over its 14-year term, signifies a major step forward in the partnership between the two industry leaders.
The landmark deal marks another significant milestone for ADNOC Gas as it expands its global reach, reinforcing its position as a global LNG export partner of choice, and reaffirming IOCL as its key strategic partner in the LNG market.
Commenting on the agreement, Ahmed Alebri, Chief Executive Officer of ADNOC Gas, said, “We are pleased to announce this long-term LNG sale, further strengthening the long-standing partnership with IOCL. We look forward to expanding our collaboration and take pride in the knowledge that ADNOC Gas’ LNG exports will further support the development of IOCL and contribute to India’s growth story.”
Under the terms of the agreement, ADNOC Gas will deliver up-to 1.2 mmtpa of LNG to IOCL in India. The deal serves as a testament to ADNOC Gas’ ability to meet the growing global demand for LNG, a critical fuel in the energy transition.
In May this year, ADNOC Gas has reported a net income of $1.3 billion for the first quarter of 2023, up 9 percent year-over-year, despite the challenging pricing environment caused by a decline in Brent crude oil prices.
The company’s Q1 2023 revenue was $5.2 billion, down from $6.2 billion for the same period in 2022, but the firm maintained an EBITDA margin of 34 percent in Q1 2023, only 1 percent lower than in Q1 2022.
The company used prevailing market conditions to undertake planned asset maintenance activities, which were completed on time and within budget, positioning it for higher volumes in Q2.
Lower prices and volumes were offset by the lower cost of raw gas supply, and ADNOC Gas’ long-term gas supply agreement provides reliable access to production from ADNOC’s upstream operations.
The agreement permits ADNOC Gas to share in any price upside and provides downward protection in a lower-price environment.
The company remains focused on increasing production capacity and driving operational efficiencies to capitalise on growing global demand for natural gas.
ADNOC Gas signed a three-year agreement with TotalEnergies to export LNG from 2023 to 2025.
The company is making progress on its $14 billion strategic and growth project portfolio, with key projects including maximizing ethane recovery and monetization, extending the gas pipeline network, and constructing an additional greenfield gas processing facility.
ADNOC Gas is targeting to pay a dividend of $1.625 billion in Q4 2023 in respect of the first half of 2023, and a further $1.625 billion dividend is targeted to be paid in Q2 2024 in respect of the second half of 2023.