Hindustan Petroleum secures a 10-year liquefied natural gas (LNG) supply contract with Adnoc Gas, a United Arab Emirates company

Hindustan Petroleum secures a 10-year liquefied natural gas (LNG) supply contract with Adnoc Gas, a United Arab Emirates company

In an effort to support India's aim of having natural gas make up a 15% share of its total energy mix by 2030, Adnoc Gas, the UAE's leading natural gas company, has announced a series of strategic expansions in the global LNG market.

Adnoc Gas's current strategy focuses on significant investment in growth projects, capacity increase, and securing long-term supply agreements with key international customers, particularly in India.

One of the key points of their expansion strategy is major investments. Adnoc Gas expects to invest around $3 billion in 2025 in growth projects such as the MERAM project, which increases ethane recovery and supports petrochemical feedstock supply, and a $5 billion final investment decision on the first phase of the Rich Gas Development (RGD) project to boost production and EBITDA by more than 40% by 2029.

Adnoc Gas's LNG production capacity is also set to increase. The company operates the Das Island liquefaction facility with a 6 million tonnes per year capacity, which is central to its LNG export strategy.

The company has recently signed a 10-year LNG deal with Hindustan Petroleum Corporation Limited (HPCL) to supply 500,000 metric tonnes annually starting 2026, sourced from Das Island to HPCL’s Chhara LNG terminal in Gujarat. This is the third long-term contract with Indian companies in the past year, building on agreements with Indian Oil Corporation (a 14-year deal for up to 1.2 million tonnes per year signed in February 2024, and a 15-year deal for 1 million tonnes annually in September 2024) and a 10-year deal with GAIL India signed in January 2024.

These deals align with Adnoc Gas’s strategy to expand in key Asian energy markets, supporting India’s goal to increase natural gas in its energy mix to 15% by 2030.

Adnoc Gas' CEO, Fatema Al Nuaimi, stated that the agreement supports India's ambition to increase natural gas to 15% of its primary energy mix by 2030. The latest agreement contract strengthens Adnoc Gas' partnership with significant Indian players.

In addition to these LNG agreements, Adnoc Distribution, the UAE's largest fuel and convenience retailer, signed an agreement with Hindustan Petroleum to explore opportunities for expanding their lubricants and allied products businesses in the UAE, India, and other markets in June 2023.

The increased focus on India is not surprising, given the forecasted 60 per cent increase in global demand for LNG by 2040, driven by Asian economic growth, emissions reductions in industry and transport, and the rise of artificial intelligence. According to Shell, the consumption of LNG is expected to reach 630 million to 718 million tonnes a year by 2040.

Adnoc Gas aims to more than double its LNG output capacity by 2028 through the strategic acquisition of the new Ruwais LNG plant from parent company Adnoc. The company supplies approximately 60 per cent of the UAE’s sales gas needs and supplies end-customers in more than 20 countries.

The latest financial reports show that Adnoc Gas' strategy is paying off. The company reported a 7 per cent year-on-year increase in net income to $1.27 billion in May this year, driven by strong domestic demand for gas and continued economic growth in the UAE.

With these expansions, Adnoc Gas is positioning itself as a key supplier to one of the fastest-growing LNG markets globally.

1. Adnoc Gas' expansion strategy in the global LNG market includes major investments, such as a $3 billion investment in growth projects in 2025, and a $5 billion final investment decision on the first phase of the Rich Gas Development (RGD) project.
2. Adnoc Gas has signed a 10-year LNG deal with Hindustan Petroleum Corporation Limited (HPCL), marking the third long-term contract with Indian companies in the past year.
3. Adnoc Gas' CEO, Fatema Al Nuaimi, stated that the agreement supports India's ambition to increase natural gas to 15% of its primary energy mix by 2030.
4. With these expansions, Adnoc Gas is positioning itself as a key supplier to one of the fastest-growing LNG markets globally, particularly Asia, given the forecasted 60 per cent increase in global demand for LNG by 2040.

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