Adnoc Gas has entered into a 10-year preliminary deal with Hindustan Petroleum Corporation (HPCL) to supply liquefied natural gas to the Indian fuel retailer, as demand for low-carbon fuel remains strong amid decarbonisation efforts.
The company, estimated to have the seventh largest natural gas reserves globally, will supply 500,000 metric tonnes of LNG per annum to HPCL, Adnoc Gas said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded. The total value of the deal has not been disclosed.
The gas will be supplied from Adnoc Gas’ Das Island liquefaction facility with a 6 mmtpa production capacity, the company stated, while explaining that the Das Island LNG plant has shipped over 3,500 LNG cargoes globally since the commencement of operations.
“This milestone underscores Adnoc Gas’s ability to reliably meet rising global demand for LNG and support India’s ambition to increase natural gas to 15 per cent of its primary energy mix by 2030,” said Fatema Al Nuaimi, chief executive of Adnoc Gas.
HPCL is Adnoc Gas’s third agreement with Indian companies since the past year. This reflects the “robust energy partnership” between the UAE and India, she added.
The latest agreement strengthens Adnoc Gas with major Indian players as it follows recent deals with Indian Oil Corporation and GAIL India and marks its presence globally in the high-demanding Asian LNG market.
By 2030, India is aiming to have natural gas make up a 15 percent share of its total energy mix.
Adnoc’s Strategic Expansion in Global LNG Markets
The latest agreement builds on Adnoc’s strategy to build its customer base after a series of agreements for LNG supply to India in the past two years.
Previously, in February, Adnoc Gas signed a 14-year deal to supply up to 1.2 million tonnes per annum of LNG to state-backed Indian Oil. The agreement is valued at an amount between $7 billion and $9 billion, Adnoc Gas said at the time, adding that Indian Oil is set to become the largest buyer of LNG from Adnoc by 2029.
The Abu Dhabi-based company signed another contract with Indian Oil in September last year, under which it signed a preliminary 15-year deal with the firm for LNG supply to India with 1 million tonnes annually.
Adnoc also signed a 10-year agreement to supply LNG to state-owned energy corporation Gail India in January last year, without disclosing the total value of that agreement.
Previously, Adnoc Distribution had signed an agreement with Hindustan Petroleum in June 2023. The purpose of the agreement was to explore opportunities for expanding their lubricants and allied products businesses in the UAE, India and other markets.
Adnoc Gas, which has access to 95 percent of the UAE’s natural gas reserves and is looking to boost exports of products such as LNG, liquefied petroleum gas, and naphtha. Alongside other Adnoc units, Adnoc Gas has been boosting investments to expand its geographical and operational reach. The company supplies approximately 60 percent of the UAE’s sales gas needs and supplies end-customers in more than 20 countries.
In February, Adnoc entered a sales and purchase agreement with Japan’s Osaka Gas for the supply of up to 800,000 tonnes a year of LNG from its Abu Dhabi Ruwais LNG project, the first long-term LNG sales deal between Adnoc and the Japanese utility.
Adnoc Gas is a key player in Adnoc’s strategy to increase its natural gas production capacity and expand global LNG exports.
In April last year, Adnoc Gas said it plans to invest more than $13 billion by 2029 to pursue domestic and international growth opportunities as it aims to expand its LNG production capacity.
By 2028, the company aims to more than double its LNG output capacity through the strategic acquisition of the new Ruwais LNG plant from parent company Adnoc and potentially target assets in Europe, India, China, and South-East Asia, it said at the time.
In May this year, Adnoc Gas reported a 7 percent year-over-year rise in net income to $1.27 billion due to robust domestic demand for gas and sustained economic growth in the UAE. The company is expected to announce its second-quarter financial results soon.
Shell’s 2025 LNG Outlook forecasts a 60 per cent growth in global demand for the fuel by 2040, driven by Asian economic growth, emissions reductions in industry and transport, and the rise of artificial intelligence. The consumption of the fuel – considered a cleaner alternative to coal and crude oil – is expected to reach 630 million tonnes to 718 million tonnes a year by 2040, compared with 407 million tonnes last year, according to Shell.
