By Ron Bousso, Marwa Rashad and Emily Chow
ADNOC has earmarked a 40% stake in its Ruwais liquefied natural gas (LNG) project to four energy majors Shell, TotalEnergies, BP, and Mitsui, sources told Multibagger. The project is set to more than double UAE's output of the sea-borne fuel and is expected to produce about 9.6 million metric tons per annum (mtpa) by late 2028.
One source mentioned that ADNOC plans to assign another 5% stake to another partner, without providing details. ADNOC has also allocated 2 mtpa to shareholders, according to another source who spoke on condition of anonymity.
The companies involved are expected to receive the offtake at a lower price compared to the market, but with less flexibility. The project, which received its final investment decision in June, is expected to be crucial for Shell and TotalEnergie's Middle East-Asia LNG trade.
ADNOC has big ambitions in gas and LNG, along with renewable energy and petrochemicals, as pillars for its future growth. As demand for natural gas surged following Russia's invasion of Ukraine, several Gulf countries, including Qatar, have been looking to capitalize on the opportunity.
ADNOC has already secured supply deals with Germany's EnBW, Securing Energy for Europe (SEFE), and China's ENN Natural Gas. The project is expected to be the region's first LNG export facility to run on clean power.
Analysis:
Investing in the Ruwais LNG project, led by ADNOC, could potentially offer lucrative returns for investors as it aims to significantly increase UAE's output of LNG. With major energy companies like Shell, TotalEnergies, BP, and Mitsui involved, the project is expected to play a crucial role in the Middle East-Asia LNG trade.
As the demand for natural gas continues to rise, driven by geopolitical events like Russia's invasion of Ukraine, investing in LNG projects like Ruwais could provide stability and growth to portfolios. Additionally, with a focus on clean power, the project aligns with the global shift towards sustainable energy sources, further enhancing its long-term outlook.
Overall, the Ruwais LNG project presents a compelling investment opportunity in the energy sector, with the potential for significant growth and positive impact on the region's energy landscape.