Adnoc Gas, a subsidiary of the Abu Dhabi National Oil Company, has signed a three-year liquified natural gas supply deal with French energy giant TotalEnergies, with exports likely to commence later this year.

Adnoc on Monday confirmed the development and said the “value of the agreement is expected to be in the range of $1 billion to $1.2 billion under current market conditions”.

“Under the terms of the agreement, through its subsidiary, Adnoc Gas will supply TotalEnergies LNG, which will be delivered to various export markets around the world,” Adnoc noted.

The emirati giant said that the “agreement demonstrates Adnoc Gas’ ability to meet growing global demand for LNG, a critical energy transition fuel”.

The three-year contract is expected to commence in 2023 and will run through 2025, reinforcing both companies’ positions as key players in the global LNG market, Adnoc stated.

Ahmed Alebri, chief executive of Adnoc Gas, said the company’s new LNG supply agreement with TotalEnergies represents another significant milestone in its strategy to expand its global reach and strengthens its “position as the LNG export partner of choice for leading global energy businesses”.

“We look forward to continuing our long-term strategic partnership with TotalEnergies, building on our shared commitment to sustainability and the energy transition,” he said.

Thomas Maurisse, senior vice president LNG at TotalEnergies, said the additional volumes will strengthen its global LNG portfolio and its “ability to supply the growing Asian markets”.

Adnoc Gas

Adnoc Gas was created on 1 January, combining Adnoc LNG and Adnoc Gas Processing.

The consolidation of Adnoc’s gas processing and LNG operations is expected to create one of the world’s largest gas processing entities, with capacity of about 10 billion cubic feet per day of gas across eight sites, both onshore and offshore, and a pipeline network of over 3250 kilometres, according to Adnoc.

“As Adnoc grows its gas production and processing capacity, the combined scale and capabilities of Adnoc Gas will maximise value and create new opportunities for Adnoc, its partners [and the UAE],” Adnoc earlier said.

Adnoc chief executive Sultan Ahmed Al Jaber has stated that formation of the new company “represents another major milestone in unlocking the full value of the UAE’s vast natural gas resources”.

“Natural gas will be a critical fuel in the energy transition and Adnoc Gas, through its world-scale operations and significant growth and expansion plans, will be well-positioned to meet both local and international gas demand,” he added.

Adnoc LNG includes among its partners Japan’s Mitsui & Co, UK supermajor BP and French giant TotalEnergies; while Adnoc Gas Processing comprises UK supermajor Shell, TotalEnergies and Thailand’s PTTEP.

Adnoc is building the 10 million tonnes per annum Fujairah liquefaction project and aims to emerge as a long-term exporter of LNG, while also achieving domestic self-sufficiency in natural gas.

It is also spending billions of dollars on developing the complex Hail & Ghasha sour gas fields, which could add to up to 1.5 Bcfd of gas production in the coming years.