ADNOC GAS EXPECTS STRONG GLOBAL DEMAND FOR LNG

The UAE’s largest supplier of liquefied natural gas sees strong demand for the fuel for the rest of the decade and is also increasing supply.

ADNOC Gas Plc, a unit of Abu Dhabi National Oil Co., has increased its capital spending plan to $15 billion over the next five years from about $13 billion previously, the company said in a statement Monday. The company is expanding domestic processing capacity, taking control of the offshore LNG plant from its parent company once construction is complete.

“Our LNG business is growing based on the demand we are seeing,” Chief Financial Officer Peter van Driel said in an interview with Bloomberg Television. Supply will follow demand growth, “particularly in the East and Asia.”

Oil companies in the Middle East are expanding 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 is buying stakes in export facilities in the United States and Africa. Saudi Arabia aims to increase gas production by 60% this decade, while Qatar is in the midst of a major LNG expansion.

"We don't see" any oversupply that could impact sales, van Driel said. ADNOC Gas can sell gas to both Europe and Asia and plans to sign new contracts to supply LNG from the 9.6 million tonnes-per-year Ruwais plant, he said, without giving a timeline for the deals. Last week, ADNOC signed a definitive agreement with German company SEFE to sell 1 million tonnes per year over 15 years from the project.

According to van Driel, ADNOC Gas's investment plan does not include two potential gas expansion projects that have not yet been decided whether to proceed.

The company intends to acquire a 60% stake in the Ruwais plant in 2028 from its parent company ADNOC for about $5 billion. Preliminary and final agreements have already been signed for 75% of the capacity and the company will retain 15% to 20% of the gas to sell on the spot market, he said.