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According to Adnoc, the SPA converts the previous heads of agreement between the two firms into a definitive agreement.
Under the 15-year deal, Adnoc will supply 1 million tonnes per annum of LNG to Petronas.
Also, the LNG supplies will primarily be sourced from the Ruwais LNG project, with deliveries expected to start in 2028 upon the start of its commercial operations.
Shamsairi Ibrahim, vice president of LNG marketing and trading at Petronas said this partnership with Adnoc marks a “significant milestone in strengthening Petronas’ business with the UAE, complementing our upstream activities while reinforcing the strategic economic relationship between the UAE and Malaysia.”
“This collaboration bolsters our LNG portfolio with a reliable supply of lower-carbon energy to meet Malaysia’s domestic demand, enhances security of supply for our customers, and fosters deeper government-to-government collaboration,” he said.
Petronas reported a rise in its LNG sales in the first half of this year.
The company’s LNG sales rose by 8 percent year-on-year to 17.8 million tonnes during January-June.
In Malaysia, Petronas operates the giant Bintulu LNG complex with a capacity of about 29.3 mtpa.
Also, the company operates two floating LNG facilities, namely the 1.2 mtpa PFLNG Satu, and the 1.5 mtpa PFLNG Dua, both located offshore Sabah.
It is also working on the nearshore floating LNG project in Sabah, its third FLNG.
Over 8 mtpa of Ruwais LNG capacity committed
This is the second definitive agreement for the supply of LNG from the 9.6 mtpa Ruwais LNG project.
Adnoc recently signed the first SPA with German gas importer Securing Energy for Europe (SEFE).
To date, over 8 mtpa of the LNG project’s production capacity has been committed to international customers through long-term agreements, Adnoc said.
State-owned Adnoc recently also signed a heads of agreement with Indian Oil and it signed a deal with Japan’s Osaka Gas.
In June, Adnoc announced the final investment decision on the Ruwais project and the EPC award to a joint venture led by France’s Technip Energies.
Prior to that, Adnoc issued in March this year a limited notice to proceed for early engineering, procurement, and construction activities to the joint venture.
Besides this EPC deal, Adnoc Gas also awarded US energy services firm Baker Hughes a contract for the LNG export terminal.
Baker Hughes will provide two electric liquefaction systems (e-LNG) for the Ruwais LNG project.
Moreover, BP, Mitsui & Co., Shell, and TotalEnergies agreed to buy a 10 percent equity stake in Adnoc’s LNG export terminal.
Adnoc will retain a 60 percent majority stake and sell it to its unit Adnoc Gas for about $5 billion.
The LNG project will more than double Adnoc’s existing UAE LNG production capacity to around 15 mtpa, as the company builds its international LNG portfolio.
Adnoc currently owns a 70 percent stake in Adnoc LNG, which currently produces about 6 mtpa of LNG from its facilities on Das Island.