Ruwais; Source: ADNOC

Germany and UAE bolster natural gas ties as ADNOC strikes third 15-year deal for giant LNG project

With energy security and decarbonization running the show, EnBW Energie Baden-Württemberg (EnBW), an energy player in Germany, has sealed its first liquefied natural gas (LNG) deal in the Middle East by inking a long-term contract with the UAE’s oil and gas heavyweight, Abu Dhabi National Oil Company (ADNOC), for the delivery of 0.6 million metric tons per annum (mmtpa) of LNG from a huge project, which is expected to be powered by clean and low-carbon energy once it comes into operation.

Ruwais; Source: ADNOC

The signing of a 15-year, 0.6 mmtpa LNG supply heads of agreement between ADNOC and EnBW builds on the ‘UAE-Germany Energy Security and Industry Accelerator (ESIA),signed in 2022, which aims to advance cooperation in energy security, decarbonization, and lower-carbon fuels between the two countries. The UAE giant believes that this deal, which builds upon its delivery of the first LNG cargo from the Middle East to Germany in 2023, reinforces its position as a reliable global natural gas provider.

Peter Heydecker, EnBW’s Board Member for Sustainable Generation Infrastructure, commented: “We are delighted that EnBW has signed its first LNG contract in the Middle East with our experienced partner ADNOC. In doing so, we are taking the next step in terms of diversifying our procurement portfolio and establishing our own LNG value chain. We can also use the experience gained here for our medium-term goal of establishing an import structure for green gases, since the two business fields are very similar.”

Furthermore, the LNG for this deal will primarily be sourced from ADNOC’s lower-carbon Ruwais LNG project, currently under development in Al Ruwais Industrial City, Abu Dhabi, and marks the third long-term LNG supply agreement for the project, following the second such supply agreement from March 2024, which was penned with SEFE Marketing & Trading Singapore, a subsidiary of Germany’s SEFE Securing Energy for Europe, for the delivery of 1 mmtpa of LNG and the first 15-year HOA with China’s ENN Natural Gas from December 2023.

The deliveries for the third deal are expected to start in 2028, upon the start-up of commercial operations of the Ruwais LNG plant, which ADNOC claims is set to be the first LNG export facility in the Middle East and Africa region to run on clean power. The project will leverage the latest technologies and artificial intelligence (AI) tools to minimize emissions and drive efficiency. According to the company, Ruwais LNG will be one of the world’s lowest-carbon-intensity LNG facilities.

The signing of the contract with Peter Heydecker, Board Member for Sustainable Generation Infrastructure at EnBW, and Fatema Al Nuaimi, Executive Vice President of Downstream Business Management at ADNOC; Source: ADNOC

Fatema Al Nuaimi, ADNOC’s Executive Vice President of Downstream Business Management, outlined: “The Ruwais LNG project continues to gain momentum, reinforcing ADNOC’s position as a reliable global natural gas provider. This new agreement builds on the UAE-Germany Energy Security and Industry Accelerator and will support Germany as it strives to diversify its energy sources and enhance its energy security.”

While this move showcases EnBW’s pursuit of its strategy of further expanding its LNG activities and diversifying its gas sources in action, the LNG agreement is contingent upon a final investment decision (FID) being taken on the Ruwais LNG project, including regulatory approvals, and the negotiation of a definitive sale and purchase agreement between the two companies.

In March 2024, ADNOC issued a limited notice to proceed (LNTP) with early engineering, procurement, and construction (EPC) activities for the LNG project to a joint venture comprising Technip Energies, JGC Corporation, and National Petroleum Construction Company.

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Upon completion, the Ruwais project, consisting of two 4.8 mmtpa LNG liquefaction trains with a total capacity of 9.6 mmtpa, will more than double ADNOC’s LNG production capacity to around 15 mmtpa. 

The Middle East’s first LNG liquefaction plant to cover its electricity needs from low-carbon sources is expected to optimize the carbon footprint for LNG production with the use of AI technologies set to guarantee a high level of energy efficiency in the overall process.