Adnoc Gas, estimated to have the seventh largest gas reserves globally, has signed a five-year liquefied natural gas supply agreement with Japan Petroleum Exploration Co (Japex).
The agreement is valued between $450 million and $550 million, the company said in a statement on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.
“Japan is one of the UAE’s largest and most important energy partners and we are very pleased to strengthen this relationship through this LNG supply agreement," said Ahmed Alebri, chief executive of Adnoc Gas.
"The agreement reinforces Adnoc Gas’ position as a global LNG export partner of choice and highlights the company’s growing global presence, particularly in the Asian LNG market,” he said.
The deal comes a month after Adnoc Gas announced a 14-year supply agreement with Indian Oil Corporation Limited, the South Asian country’s largest refiner.
Adnoc Gas will supply up to 1.2 million metric tonnes per annum of LNG to IOCL as part of the deal, which is valued at between $7 billion and $9 billion.
Competition for LNG has increased since Russia's invasion of Ukraine last year, with Europe importing record volumes of the supercooled fuel to replace Moscow's gas supplies.
Global LNG trade hit a high of $450 billion in 2022 amid a surge in European demand, according to the International Energy Agency.
Adnoc Gas, which has access to 95 per cent of the UAE's natural gas reserves, supplies more than 60 per cent of the country's gas needs.
The company has also signed a three-year supply agreement with TotalEnergies Gas and Power, a subsidiary of France’s TotalEnergies, for the export of LNG as demand for less polluting fuel picks up globally amid decarbonisation efforts.
Japan, the world’s third-largest economy and fourth-largest crude importer, is looking to bolster its energy security by entering into long-term LNG agreements and adding more renewable resources to its overall energy mix.
In December, Inpex, Japan’s largest oil and gas exploration company, signed an agreement with US-based Venture Global LNG for the supply of a million tonnes annually for the next 20 years.
Last month, the UAE and Japan signed 23 agreements and initial pacts during a business forum aimed at bolstering economic, trade and investment ties between the two countries in the fields of energy, industry, advanced technology, artificial intelligence, space, health, transport, environmental conservation and circular economy.
Total trade between the two countries amounted to $51.7 billion in 2022, while non-oil trade exchange reached $14.7 billion, of which non-oil imports to the UAE were $12 billion.
Earlier this year, Adnoc raised about Dh9.1 billion ($2.5 billion) from the sale of a 5 per cent stake in Adnoc Gas.
The company sold more than 3.8 billion shares, with the initial public offering drawing strong demand from institutional and retail investors, and generating more than $124 billion in orders.
Adnoc Gas reported an annual 12 per cent drop in net profit for the first half of 2023 to $2.25 billion. The company's revenue during the same period stood at $10.62 billion.
