Germany’s EnBW strikes 15-year supply deal w/ UAE’s ADNOC

German utility company EnBW announced the signing of a 15-year liquefied natural gas (LNG) contract with Abu Dhabi National Oil Company (ADNOC), Reuters reported on Wednesday.

This agreement comes as Europe increases its LNG imports following disruptions in westbound pipeline gas shipments due to Russia’s invasion of Ukraine. Moreover, the agreement marks EnBW’s first LNG deal with a Middle Eastern partner and is expected to enhance procurement diversity and expedite the development of an LNG value chain.

Under the terms of the contract, ADNOC will supply 0.6 million metric tons per year of LNG to EnBW starting from 2028. ADNOC’s emphasis on natural gas as a transitional fuel aligns with global efforts to reduce emissions, particularly with Russian supply cuts driving up LNG demand.

Notably, in December, ADNOC also secured a 15-year LNG agreement with a Singapore-based subsidiary of China’s ENN Natural Gas for the Ruwais project, which aims to be the region’s inaugural LNG export facility powered by clean energy. EnBW anticipates Ruwais, ADNOC’s LNG project, to yield 9.6 million tons overall.

EnBW highlighted the environmental benefits of Ruwais, emphasising its electric liquefaction system to improve carbon dioxide emissions balance and the integration of artificial intelligence (AI) technologies to enhance energy efficiency during LNG production.

EnBW’s commitment to sustainability is evident in its plan to invest 40 billion euros ($42.98 billion) by 2030 to transition its generation portfolio towards renewable energy sources, aiming for over half of its capacity to come from renewables by 2030 and potentially phasing out coal burning by 2028. Financial specifics of the ADNOC agreement were not disclosed.