Abu Dhabi National Oil Company (Adnoc) is offering India a stake in its forthcoming LNG liquefaction terminal at Ruwais in Abu Dhabi. Concurrently, Indian Oil Corp Ltd (IOCL) is preparing to finalize a long-term agreement to purchase one million metric tons per annum (mmtpa) of LNG from Adnoc.
If the deal materialises, it would mark India’s first equity investment in an overseas LNG terminal, bolstering the energy security initiatives of the world’s third-largest energy consumer. This development underscores the strengthening partnership between India and the UAE, an OPEC member.
India has signed a free-trade agreement with the UAE. The LNG project at Al Ruwais Industrial City is set to feature two LNG liquefaction trains, each with a capacity of 4.8 mmtpa, totalling 9.6 mmtpa. This will effectively double Adnoc’s LNG production capacity to approximately 15 mmtpa.
Adnoc has already secured three LNG agreements from this project with Germany’s SEFE Marketing and Trading Singapore Pte Ltd, EnBW Energie Baden-Württemberg AG (EnBW), and China’s ENN Natural Gas.
India currently imports around 55% of its gas requirements to satisfy the increasing demand from its fertilizer, power, and city gas distribution sectors. According to the Petroleum Planning and Analysis Cell (PPAC), India’s LNG imports rose by 17.5% year-on-year in FY24 to 23.5 mmtpa.
The proposed deal aligns with India’s strategy to strengthen its LNG imports. IOCL signed a long-term contract with France’s TotalEnergies for one mmtpa of LNG for about ten years, as reported by Mint.
