Shell to invest in Ruwais LNG project in Abu Dhabi

 Shell Overseas Holdings Limited, a subsidiary of Shell plc (Shell), has signed an agreement to invest in the Abu Dhabi National Oil Company’s (ADNOC) Ruwais liquefied natural gas (LNG) project in Abu Dhabi through a 10% participating interest.

“This investment decision builds on our long-standing partnership with ADNOC," said Shell's Chief Executive Officer Wael Sawan. "In line with our strategy to create more value with less emissions, we are investing in additional LNG capacity and further growing our world-leading LNG portfolio, with energy-efficient and carbon-competitive projects."

The Ruwais LNG project will consist of two 4.8 million metric tonnes per annum (mmtpa) LNG liquefaction trains with a total capacity of 9.6 mmtpa. Shell, through its subsidiary Shell International Trading Middle East Limited FZE, has also signed an agreement to offtake 1 mmtpa of LNG produced by the project. The Ruwais LNG facility is set to have an electric-powered liquefaction system and will utilise access to a renewable power supply. This design supports lower operational emissions compared to traditional gas-powered LNG facilities.

ADNOC will hold a majority 60% share in the project and serve as the lead developer and operator of the facility, while Shell, BP, Mitsui and TotalEnergies will each hold 10%.

ADNOC has awarded an engineering, procurement and construction (EPC) contract to a Technip-led joint venture and will soon start construction in Al Ruwais Industrial City, Abu Dhabi. LNG deliveries are expected to start in 2028.

Notes to editors
The Ruwais LNG project is located some 240 kilometres west of Abu Dhabi, United Arab Emirates.
Shell has a proud history of more than 80 years in the United Arab Emirates. Shell’s current activities with ADNOC include a 15% interest in ADNOC Gas Processing (AGP) with associated technical and manpower support services.
The capital investment related to Shell’s 10% participating interest in the Ruwais LNG project will be absorbed within Shell’s cash capital expenditure guidance, which remains unchanged. The deal is in excess of the internal rate of return (IRR) hurdle rate for Shell’s Integrated Gas business, delivering on its 25-30% growth ambition in liquefaction volumes, relative to 2022, as outlined during the 2023 Capital Markets Day.
Global demand for LNG is estimated to rise by more than 50% by 2040, as industrial coal-to-gas switching gathers pace in China, South Asian and South-east Asian countries. These countries are expected to use more LNG to support their economic growth, according to Shell’s LNG Outlook 2024 (PDF)
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Shell believes LNG will play a critical role in the energy transition, replacing coal in heavy industry. It also has a continued role in displacing coal in power generation, helping to reduce local air pollution and carbon emissions. LNG helps to provide the flexibility the power system needs, at a time when renewable generation is growing rapidly. Find out more in Shell’s Energy Transition Strategy 2024 (PDF)

Technip Energies, JGC and NMDC Energy awarded a major contract for ADNOC’s Ruwais LNG project in the UAE

Technip Energies (PARIS:TE), leader of a joint venture (TJN RUWAIS JV) with JGC and NMDC Energy, have been awarded a major contract by ADNOC for the engineering, procurement and construction (EPC) of the lower-carbon Ruwais LNG project, located in Al Ruwais Industrial City, Abu Dhabi.

The project will consist of two natural gas liquefaction trains with a total LNG production capacity of 9.6 Mtpa(2). The plant will use electric-driven motors instead of conventional gas turbines and will be powered by clean energy.

The plant is set to be the first LNG export facility in the Middle East and North Africa (MENA) region to run on clean power, making it one of the lowest-carbon intensity LNG plants in the world.

The project will more than double ADNOC's LNG production capacity aligning with global natural gas demand and the shift towards decarbonization.

Arnaud Pieton, CEO of Technip Energies, commented, “We are honored to have been awarded by ADNOC the Ruwais LNG project, a pioneering initiative in the LNG sector. By powering electrified LNG trains with nuclear energy, this project sets a new standard for energy security and sustainability. By leveraging our low-carbon and electrified LNG leadership we will support ADNOC’s position as a reliable global natural gas supplier and commitment to decarbonization.”

Farhan Mujib, Representative Director, President of JGC, commented, “We are highly honored to have been awarded in this innovative lower-carbon LNG project which will be the next generation of energy security and sustainability. We commit to leveraging our capabilities and experience for the lower-carbon Ruwais LNG project, bringing our proven track record in the LNG field. We are convinced this will contribute to the success of the project and enhance economic growth in the UAE.”

Ahmed Al Dhaheri, CEO of NMDC Energy, commented, "We are proud to be entrusted by ADNOC with the Ruwais LNG project, which strengthens our position in the UAE’s energy landscape and underscores our dedication to advancing the country’s sustainable development. Utilizing nuclear energy for LNG production not only sets a new international standard for low-emission energy but also aligns with the UAE’s strategy for a sustainable future.”

Santos signs long-term LNG supply contract with Hokkaido Gas

Santos today announced the signing of a binding long-term LNG Supply and Purchase Agreement (SPA) with Hokkaido Gas Co., Ltd. to provide LNG from Santos’ portfolio of world-class LNG assets.

The long-term SPA will supply up to approximately 0.4 million tonnes per annum of LNG for 10 years, commencing in 2027, from Santos’ LNG portfolio on a delivered ex-ship basis.

Hokkaido Gas and Santos also intend to collaborate to explore carbon sequestration and e-methane opportunities to reduce carbon emissions across their respective portfolios.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said the contract is consistent with Santos’ strategy of maintaining long-term LNG pricing and demonstrates the value of Santos’ high-quality LNG portfolio. This agreement further demonstrates the strong demand for high heating value LNG from projects such as Barossa and PNG LNG.

“This SPA is a significant step in developing Santos’ equity LNG portfolio and establishes a long-term relationship with Hokkaido Gas, a Japanese gas utility providing natural gas within the Hokkaido region of Japan.”

“Our agreement with Hokkaido Gas demonstrates Santos’ commitment to providing reliable, competitive energy supplies to support our valued customers in Asia. We also look forward to working together to explore CCS and e-methane opportunities to support Japan’s and Santos’ decarbonisation targets,” Mr Gallagher said.

ADNOC to Acquire 10% Equity Stake in Major LNG Development in Mozambique

ADNOC announced today the acquisition of Galp’s 10% interest in the Area 4 concession of the Rovuma basin in Mozambique, marking a major milestone in the company’s international growth strategy. The acquisition will entitle ADNOC to a share of the liquefied natural gas (LNG) production from the concession, which has a combined production capacity exceeding 25 million tonnes per annum (mtpa).

The Area 4 concession includes the operational Coral South Floating LNG (FLNG) facility, the planned Coral North FLNG development and the planned Rovuma LNG onshore facilities. This strategic investment is ADNOC’s first in Mozambique and complements ADNOC’s efforts to expand its lower-carbon LNG portfolio to meet growing gas demand and support a just, orderly and equitable energy transition.

Musabbeh Al Kaabi, ADNOC Executive Director for Low Carbon Solutions and International Growth, said: “For over fifty years, ADNOC has been a reliable and responsible global provider of LNG and we are building on this role with this landmark investment in the world-class Rovuma supergiant gas basin in Mozambique as we deliver on our international growth strategy. Natural gas plays an important role to meet growing global demand with lower emissions compared to other fossil fuels and this acquisition supports our efforts to build an integrated global gas business to ensure we continue providing a secure, reliable and responsible supply of natural gas.”

The Coral South development, currently in operation, is capable of producing up to 3.5 mtpa of LNG, and represents the first facility of its kind in Africa. The proposed Coral North development is expected to produce a further 3.5 mtpa of LNG through a FLNG facility to process and liquefy natural gas for export.

The 18-mtpa Rovuma Onshore LNG development is a modular, electric-drive design that will dramatically reduce the carbon intensity of the LNG it produces, when compared to industry benchmarks. The facility’s design philosophy and its emphasis on limiting carbon dioxide (CO2) emissions aligns with ADNOC’s ambition to achieve net zero by 2045.

Mozambique’s Rovuma supergiant gas basin represents one of the world’s largest gas discoveries in the past fifteen years and holds proven reserves to provide a stable supply of natural gas to the FLNG and Onshore facilities.

ADNOC Signs Third Long-Term Heads of Agreement for Ruwais LNG Project

ADNOC announced today the signing of a 15-year Heads of Agreement (LNG agreement) with EnBW Energie Baden-Württemberg AG (EnBW), one of the largest energy companies in Germany, for the delivery of 0.6 million metric tonnes per annum (mmtpa) of liquefied natural gas (LNG).

The LNG will primarily be sourced from ADNOC’s lower-carbon Ruwais LNG project, currently under development in Al Ruwais Industrial City, Abu Dhabi. The Ruwais LNG plant is set to be the first LNG export facility in the Middle East and Africa region to run on clean power and will leverage the latest technologies and artificial intelligence (AI) tools to minimize emissions and drive efficiency.

This agreement marks the third long-term LNG supply agreement from the project. The deliveries are expected to start in 2028, upon commencement of commercial operations.

Fatema Al Nuaimi, ADNOC Executive Vice President, Downstream Business Management, said: “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.”

The UAE-Germany Energy Security and Industry Accelerator (ESIA), signed in 2022, aims to advance cooperation in energy security, decarbonization and lower-carbon fuels.

Peter Heydecker, EnBW’s Board Member for Sustainable Generation Infrastructure, said: “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.”

The LNG agreement is contingent upon a final investment decision (FID) on the project, including regulatory approvals, and the negotiation of a definitive Sale and Purchase Agreement between the two companies. When completed, the project, which consists 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 15mmtpa.

ADNOC Secures Equity Position and LNG Offtake Agreement in NextDecades Rio Grande LNG Project

ADNOC announced today the acquisition of a 11.7% stake in Phase 1 (Trains 1-3) of NextDecade Corporation’s (NextDecade) (Nasdaq: NEXT) Rio Grande LNG (RGLNG) Rio Grande LNG (RGLNG), a leading liquefied natural gas (LNG) export project located in Texas, United States (US), which is expected to produce a less carbon-intensive LNG. Additionally, ADNOC and NextDecade announced that they have entered into a 20-year LNG offtake agreement from RGLNG Train 4.

The Phase 1 RGLNG equity stake has been acquired through an investment vehicle of Global Infrastructure Partners (GIP), one of the world’s premier infrastructure investors. ADNOC acquired a portion of GIP’s existing equity interest in Phase 1 while NextDecade retains its previously announced expected economic interest in Phase 1 as well as its interests in the Train 4 and Train 5 expansion capacity.

The Phase 1 acquisition marks ADNOC’s first strategic investment in the US as it continues to deliver on its international growth strategy and complements its efforts to expand its lower-carbon LNG portfolio to meet growing gas demand.

The 20-year LNG offtake agreement between ADNOC and NextDecade is for 1.9 million tons per annum (mtpa) from RGLNG Train 4, on a free on board (FOB) basis at a price indexed to Henry Hub, subject to a Final Investment Decision (FID).

Musabbeh Al Kaabi, ADNOC Executive Director for Low Carbon Solutions and International Growth, said: "We are delighted to partner with NextDecade on this world-class lower-carbon LNG project as it marks a significant milestone in ADNOC’s international growth strategy and provides us access to one of the world’s top LNG export markets. As global energy demand continues to increase, ADNOC is growing our diversified energy portfolio to ensure a secure, reliable and responsible supply of energy to our customers while driving innovation and greater value.”

Rio Grande LNG, situated on a 984-acre site near Brownsville, Texas, is the first US LNG project offering expected emissions reduction of more than 90% through its innovative proposed carbon capture and storage (CCS) project, which is expected to capture and permanently store more than 5 million metric tons per annum of carbon dioxide (CO2) – equivalent to removing 1 million vehicles from the road annually.

Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer, said: “We are excited to begin a multi-decade partnership with ADNOC, a major player in the global LNG market, and we look forward to having them as both a commercial offtaker and an equity partner in Rio Grande LNG. LNG from our facility will allow ADNOC to further increase its presence in the global LNG market, while also supplying global customers with more affordable and less carbon-intensive LNG.”

ADNOC’s acquisition of an equity stake in Phase 1 (Trains 1-3) of Rio Grande LNG also secures the option from GIP for equity participation in the future Trains 4 and 5 of the project.

NextDecade is currently targeting FID on Train 4 at the Rio Grande LNG Facility in the second half of 2024, subject to, among other things, finalizing and entering into an Engineering, Procurement and Construction (EPC) contract, entering into appropriate commercial arrangements, and obtaining adequate financing to construct Train 4 and related infrastructure.

MOL and Gaz System enter into agreement on FSRU project in Gdańsk, Poland

Mitsui O.S.K. Lines, Ltd. (MOL; President & CEO: Takeshi Hashimoto, Headquarters: Minato-ku, Tokyo), today announced that it has signed a long term Time Charter Party (TCP) Agreement, through its 100% subsidiary, for one Floating Storage and Regasification Unit (FSRU) with the Polish Gas Transmission System Operator, GAZ-SYSTEM S.A. (Gaz System), the project developer and operator behind the future LNG terminal. The FSRU will be constructed by HD Hyundai Heavy Industries shipyard (HQ: South Korea) and is expected to be completed in 2027, and thereafter will be managed by the MOL group.

The project involves the construction of a new floating LNG receiving terminal approximately 3 km offshore from the Polish port of Gdańsk (the "Project") and the vessel will play a key role in the terminal as receiving and storage facility. This will be the first FSRU to be deployed in Poland, which will contribute to the strategic strengthening of the country's energy security. The project is also of great interest to Europe, as it has been designated by the EU as a "Project of Common Interest", an infrastructure development project that contributes at a regional level.