Page 6 - AsiaElec Week 46

AsiaElec COMMENTARY AsiaElec
ADNOC signs downstream, LNG deals at ADIPEC
ADNOC has signed deals across upstream, midstream and technology this week as it seeks to diversify its appeal and maintain strong ties with end-users
ASIA
WHAT:
ADNOC is the centre of attention this week, with a diverse array of energy firms descending on Abu Dhabi for ADIPEC
WHY:
The company is seeking to monetise its assets in a wide variety of business streams, with the downstream getting its fair share of attention
WHAT NEXT:
Both ADNOC and Aramco are taking strides to build out LNG capabilities, mirroring their strategy for oil monetisation in the gas sector
WITH the energy world this week focused on Abu Dhabi, the local state firm has wasted little time in clinching deals at this year’s ADIPEC event.
Abu Dhabi National Oil Co. (ADNOC) announced on November 12 that it had signed a framework deal with Chinaese firm Rongsheng Petrochemical Co. “to explore domestic and international growth opportunities which will support the delivery of its 2030 smart growth strategy.”
The same day, ADNOC’s LNG arm announced that this week it had signed supply agreements with subsidiaries of BP and Total, booking out the bulk of production until early 2022.
Rongsheng
In an official statement, the Emirati firm said that the deal would see the companies look for downstream investment opportunities in China and the UAE, with ADNOC providing LNG to Rongsheng.
At the signing, ADNOC CEO, HE Dr Sultan Ahmed Al Jaber, said that the companies would explore opportunities across sectors that “have the potential to open new markets for our grow- ing portfolio of products and attract investment to support our downstream and gas expansion plans.”
The contract stipulates that the two compa- nies will explore opportunities for “increasing the volume and variety of refined products sales to Rongsheng” in addition to ADNOC being an active partner in refining and petrochemical opportunities, including an investment in Rong- sheng’s downstream complex.
Meanwhile, Rongsheng will reciprocate by considering investments in ADNOC’s down- stream hub at Ruwais and the potential for ADNOC to supply and deliver LNG to Rong- sheng in China.
Rongsheng chairman Li Shurong said that the deal would ensure that the company’s $25bn Zhejiang Integrated Refining & Petrochemi- cal Complex would “have a refining capacity of 1mn barrels per day of crude. The facility is under development by Zhejiang Petrochemicals Co. (ZPC), with local shareholders including
Rongsheng, Juhua Group and Tongkun Group having signed a memorandum of understanding (MoU) with Saudi Aramco early this year for the latter to acquire a 9% stake in the project.
BP and Total
At the signing of the deals with BP and Total, ADNOC LNG CEO Fatema Al Nuaimi said: “With these new supply agreements, ADNOC LNG has shown that it can react quickly and decisively to changing market conditions while ensuring the security and quality of delivery.” She added: “With the support of our shareholders, we have maximised access to new markets with strong LNG growth potential”
The signing of the deals was witnessed by UAE Minister of State and ADNOC CEO Al Jaber, CEO of BP Bob Dudley and Patrick Pouy- anné, chairman and CEO of Total.
ADNOC LNG is majority-owned by ADNOC (70%), which is partnered by Mitsui & Co. (15%), BP (10%), and Total (5%).
ADNOC’s statement to the press made much
of efforts to diversify its LNG customer base.
Since April, ADNOC has shifted from supply-
ing 90% of its LNG to a single Japanese customer
– JERA – to now delivering 90% of LNG output
to clients and receiving terminals in more than ADNOC’s eight countries across southern and south-east
Asia. These include India, China, South Korea
and Taiwan.
Laurent Chevalier, Total’s vice-president
Middle East, gas, renewables & power, said:
“The 2-year LNG supply agreement contrib-
utes to the growth and flexibility of Total’s LNG diversify its LNG portfolio and strengthens our long-standing
relationship with ADNOC LNG.”
ADNOC LNG has a production capacity of
6mn tonnes per year (tpy) from facilities on Das Island off the coast of Abu Dhabi.
LNG intent
The deals came almost a year to the day since ADNOC and fellow Gulf NOC Saudi Aramco announced a second major international collab- oration at last year’s ADIPEC, pledging to co-op- erate on investment in the global LNG sector.
The neighbours both combine plentiful reserves of crude oil with a growing shortage
customer base
statement to the press made much of efforts to
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w w w . N E W S B A S E . c o m Week 46 20•November•2019