HomeNewsGermany's EnBW Signs 15-Year LNG Supply Deal with ADNOC

Germany's EnBW Signs 15-Year LNG Supply Deal with ADNOC

5/9/2024

(Reuters) — German utility company EnBW said it has signed a 15-year liquefied natural gas (LNG) contract with Abu Dhabi National Oil Company (ADNOC), as Europe boosts LNG imports after Russia's invasion of Ukraine curtailed westbound pipeline gas shipments.

ADNOC, which in March committed to delivering LNG to EnBW's German rival SEFE from its new Ruwais LNG project from 2028 onwards, is set to send 0.6 million metric tons per year to EnBW also from 2028, an EnBW press release said on Wednesday.

For EnBW, a southwest German power and gas supplier, the step marks its first LNG contract with a Middle Eastern partner, which it said will help it diversify its procurement and speed the creation of an LNG value chain.

ADNOC has sharpened its focus on natural gas, seeing it as a transition fuel as the world tries to curb planet-warming emissions, and Russian supply cuts have boosted LNG demand.

Ruwais is projected to deliver 9.6 million tons overall, EnBW said.

ADNOC in December signed a 15-year LNG deal with a Singapore-based subsidiary of China's ENN Natural Gas from Ruwais, which is set to be the first LNG export facility in the region to run on clean power.

The electric drive of the liquefaction system will improve the carbon dioxide emissions balance during LNG production and artificial intelligence (AI) technologies will improve the energy efficiency of the process, EnBW said.

EnBW has earmarked 40 billion euros ($42.98 billion) of investments up to 2030 to green its generation portfolio, aiming for more than half of capacity to be derived from renewable power by 2030 and potentially leaving coal burning from 2028.

It did not give financial details of the agreement with ADNOC.

($1 = 0.9308 euros)

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