Page 5 - MEOG Week 46

MEOG Commentary MEOG
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.
Uae
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. Ltd. “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 this week that 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 be Zhejiang Petrochemicals Co. (ZPC), with local shareholders including rongsheng, Juhua Group and Tongkun Group having signed a memorandum of understanding 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 press made much of efforts to diversify its LNG customer base. Since April, ADNOC has shifted from supplying 90% of its LNG to a single Japanese customer – JErA – to now supplying 90% of LNG output to clients and receiving terminals in more than eight coun- tries across southern and southeast Asia. These include India, China, South Korea and Taiwan.
Laurent Chevalier, Total’s vice president Mid- dle East, gas, renewables & power, said: “The 2 year LNG Supply Agreement contributes to the growth and flexibility of Total’s LNG portfolio and strengthens our longstanding relationship with ADNOC LNG.”
ADNOC LNG has a production capacity of 6mn tonnes per year from facilities on Das Island off the coast of Abu Dhabi.
Week 46 20•November•2019 w w w . N E W S B A S E . c o m P5