Adnoc Gas signs 5-Year LNG supply agreement with Japanese company
- 17 Aug 2023
Adnoc Gas, a world-class integrated gas processing company, on Thursday announced a five-year liquefied natural gas (LNG) supply agreement with Japan Petroleum Exploration Co (JAPEX), the Japan-based energy company.
The agreement, valued between $450 million (Dhs1.65 billion) and $550 million (Dhs2 billion), builds on the long-standing bilateral relationship between the UAE and Japan and Adnoc’s track record of fostering mutually beneficial strategic partnerships with Japanese energy companies.
Commenting on the agreement, Ahmed Alebri, Chief Executive Officer of Adnoc Gas, said, “Japan is one of the UAE’s largest and most important energy partners and we are very pleased to strengthen this relationship through this LNG supply agreement with JAPEX. The agreement reinforces Adnoc Gas’ position as a global LNG export partner of choice and highlights the Company’s growing global presence, particularly in the Asian LNG market.” Natural gas plays a crucial role as a transitional fuel with lower carbon emissions compared to other fossil fuels. It also serves as an important raw material in industrial value chains.
Adnoc Gas continues to leverage opportunities arising from Adnoc’s integrated gas masterplan which links every part of the gas value chain in the UAE, ensuring a sustainable and economic supply of natural gas to meet local and international demand.
Adnoc Gas on last Wednesday announced the award of a $3.6 billion (Dhs13.1 billion) contract to the joint venture between National Petroleum Construction Company Co (NPCC) and Tecnicas Reunidas SA to expand its gas processing infrastructure in the UAE.
The scope of the contract includes the commissioning of new gas processing facilities which will enable an optimised supply to the Ruwais Industrial Complex.
The strategic Maximising Ethane Recovery and Monetisation (MERAM) project aims to achieve dual objectives; firstly, to increase ethane extraction, by a range of 35 - 40%, from Adnoc Gas’s existing onshore facilities in the Habshan complex through the construction of new gas processing facilities; and secondly, to unlock further value from existing feedstock and deliver it to Ruwais via a dedicated 120 kilometre natural gas liquids (NGL) pipeline.
Adnoc Gas recently announced its financial results for the three months and six months ended 30th June, 2023 (Q2 2023) and (H1 2023).
The Company’s H1 2023 revenue stood at a Dhs38.9 billion ($10.6 billion) compared to Pro Forma Adjusted Revenue of Dhs 48.8 billion ($13.3 billion) in H1 2022, impacted by the pricing environment.
Revenue in Q2 2023 was reported at Dhs 19.8 billion ($5.4 billion) compared to Pro Forma Adjusted Revenue of Dhs 26.1 billion ($7.1 billion) in Q2 2022. Adnoc Gas maintained high reliability with a 98.9 percent average across its facilities in H1 2023, contributing to a 15 percent increase in production volumes in Q2 2023 over Q1 2023.
Adnoc Gas adapted to lower LPG and Brent crude oil prices in H1 2023 compared to the high pricing environment of H1 2022. The Company strategically shifted towards higher-margin export liquids and focused on increased efficiency. These measures enabled the Company to maintain a flat EBITDA of Dhs 6.6 billion (US$1.8 billion) and Net Income of AED 3.7 billion (US$1.0 billion) in Q2 2023, demonstrating that ADNOC Gas is a predictable and resilient margin business underpinned by profitable growth.
Ahmed Alebri, Chief Executive Officer of Adnoc Gas, commented, “Our results for the first half of 2023 showcase the resilience and robustness of our business in the current lower price environment compared to the higher prices witnessed in H1 2022. For the period ending June 30th 2023, we delivered a net income of Dhs 8.4 billion (US$2.3 billion). This performance demonstrates the strength of our business, which was also supported by selling more high-margin export liquids - a strategy that has proven effective.
