Adnoc Gas on Wednesday signed a 14-year deal to supply liquefied natural gas to state-backed Indian Oil.
It will export up to 1.2 million tonnes per annum of LNG to Indian Oil. The agreement is valued between $7 billion to $9 billion over its 14-year term and “signifies a major step forward in the partnership between the two industry leaders”, the company said.
The LNG will be supplied from Adnoc's centre on Das Island, which has a production capacity of up to 6 million tonnes per annum.
“This agreement strengthens our long-standing partnership with Indian Oil and is a testament to the dynamic and robust energy ties between the UAE and India,” said Adnoc Gas chief executive Fatema Al Nuaimi.
Indian Oil is set to become the largest buyer of LNG from Adnoc by 2029.
The UAE and India signed a comprehensive economic partnership agreement in 2022 to boost trade ties between the countries. The Cepa helped non-oil trade between the UAE and India to increase by 5.8 per cent to $50.5 billion in the first 12 months after it took effect in May 2022.
The countries hope the Cepa will help them increase trade to $100 billion by 2030.
India is aiming to make have natural gas make up a 15 per cent share of its total energy mix by 2030.
The latest agreement builds on Adnoc's strategy to build its customer base after a series of LNG agreements in the past two years, the company said. These agreements, which are for periods up to 14 years, reinforce Adnoc's position as a leading supplier of reliable LNG to key growth markets in Asia, the company said.
It follows one Adnoc made with Indian Oil in September, in which it signed a preliminary 15-year agreement with the company to supply 1 million tonnes a year of LNG to India.
Adnoc also signed a 10-year agreement to supply LNG to state-owned energy corporation Gail India in January last year. It did not disclose the total value of that agreement.