The UAE’ biggest energy company approved a major liquefied natural gas export terminal as it seeks to tap into a growing global market for the fuel.
Abu Dhabi National Oil Co. made the final investment decision to build the LNG plant in the industrial city of Ruwais, according to a statement. The project will add 9.6 million tons of annual gas export capacity and more than double Adnoc’s production capability.
The company has so far relied on its own funds to build the project and on Wednesday awarded a $5.5 billion engineering and construction contract for the facility. It’s signed some sales deals with Asian and European companies for supply from the project starting in 2028, though is yet to find buyers for all of the gas.
The decision to go ahead with the facility is the latest sign of the state company’s ambition to expand in the market globally, following recent deals for LNG projects in the US and Mozambique.
The new Ruwais project will compete with vast amounts of supply from Qatar. The tiny country in the Gulf is already one of the world’s biggest producers of the fuel and is expanding capacity to 126 million tons a year by 2027 from 77 million. It plans to push it further to 142 million tons by the end of the decade.
Saudi Arabia is also bolstering its gas business, with government-owned Aramco boosting production at home, buying into LNG projects in Australia and seeking assets in the US. All three Gulf states are expanding their trading arms to maximize profit from selling gas.
Adnoc already has 6 million tons of LNG capacity at Das Island, a facility that began operations in 1977. Bloomberg News reported in March that Adnoc planned to make the final investment decision on Ruwais LNG as early as June.
