.jpeg)
The deal ADNOC announced on Wednesday comes hot on the heels
of it acquiring an 11.7% stake in NextDecade’s Rio Grande liquefied natural gas
(LNG) export facility in Texas, confirmed on Monday.
ADNOC has big ambitions in gas and LNG, which along with
renewable energy and petrochemicals, it sees as pillars for its future growth.
It plans to grow its 6 million metric tons per annum (mtpa) LNG capacity to 15
mtpa.
Demand for natural gas soared as Europe scrambled to secure
supplies to replace Russian gas in the wake of Moscow’s invasion of Ukraine
last year.
Galp said it would receive around $650 million for its
shares and shareholder loans, already net of capital gain taxes when the deal
is completed, expected this year. Lease liabilities were $525 million as of
end-2023, it added.
“Additional contingent payments of $100 m and $400 m will be
payable with the final investment decision of Coral North and Rovuma LNG,
respectively,” Galp said in a statement.
Under the terms of the deal, ADNOC will have access to a
share of the LNG production from the concession, which will have a combined
capacity of more than 25 mtpa, it said in a statement.
The Area 4 concession includes the operational Coral South
Floating LNG (FLNG) facility, as well as the planned Coral North FLNG
development and Rovuma LNG onshore facilities, which Galp said are both
expected to be given the green light in 2024/2025.
Coral South has a production capacity of 3.5 mtpa while
Coral North is expected to add another 3.5 mtpa. The onshore Rovuma development
is expected to produce 18 mtpa.
The investment “complements ADNOC’s efforts to expand its
lower-carbon LNG portfolio to meet growing gas demand” and support the energy
transition, the company said.
The state oil giant views gas as a transition fuel to
renewable energy sources. ADNOC Chief Executive Sultan Al Jaber presided over
the COP28 climate summit in Dubai last year, where nearly 200 countries agreed
to transition away from fossil fuels.
Reuters reported in October that ADNOC was on the hunt for
LNG assets in Africa and was considering buying Galp’s 10% stake in the Rovuma
basin, citing two people with knowledge of the matter.
In February, ADNOC and oil major BP said they would form a
joint venture in Egypt that would initially focus on gas. Last summer, ADNOC
said it would acquire a 30% stake in Azerbaijan’s Absheron gas and condensate
field in the Caspian Sea.
ADNOC is also developing a 9.6-mtpa LNG project in Ruwais,
west of UAE capital Abu Dhabi, expected to begin commercial operations in 2028. Reuters