Shell, TotalEnergies in Talks for Stakes in New Adnoc LNG Plant

(Bloomberg) -- Shell Plc and TotalEnergies SE are among several global energy companies in talks to buy stakes in Abu Dhabi National Oil Co.’s next liquefied natural gas export project in the United Arab Emirates.

The two oil majors, as well as Japanese trading house Mitsui & Co., are looking for equity in the Ruwais facility, as well as contracts to purchase LNG from it, according to people with knowledge of the matter. A final investment decision on the project could happen as soon as next month, said the people who asked not to be named as the information is private.

Adnoc doesn’t require investment from the energy companies to move the project forward, and may decide not to sell equity, the people said.

Adnoc, Shell, Total didn’t immediately respond to requests for comment, while Mitsui said in an emailed response that no decision had been made at this time.

Qatar and the UAE are pumping tens of billions of dollars into expanding LNG production, betting that consumption of the fuel will be robust for decades to come as its plays a major bridging role in the transition to cleaner energy sources. However, the International Energy Agency sees gas demand peaking by 2030, while the US is freezing developments to study the impacts on climate and national security. 

Ruwais, which is currently 100%-owned by Adnoc, will have the capacity to export 9.6 million tons of LNG per year, which will more than double the UAE’s total output. The oil-rich nation is still a minnow among gas producers, but this project will be pivotal as it tries to expand its role as both a supplier and trader of the super-chilled fuel.

The UAE’s only other LNG export plant, the 5.8-million ton a year Das Island facility, is owned by Adnoc LNG, of which Adnoc, Mitsui, BP and TotalEnergies are shareholders.

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