The UAE’s Abu Dhabi National Oil Co. is looking to acquire gas assets after buying a stake in an Azeri field amid a new strategy to invest in international gas projects, which would involve a wide gamut of its business, including LNG trading, a senior executive told S&P Global Commodity Insights.
Register Now After making its first major international gas investment in Azerbaijan’s Absheron gas and condensate field in the Caspian Sea, ADNOC is eager to expand into the global LNG business with an eye on high margins from these investments, Musabbeh al-Kaabi, executive director of low carbon solutions and international growth, said in an Aug. 15 interview.
"We are executing a strategy that complements our strength," said Kaabi. "We are a significant player in LNG historically and there is the expansion in Abu Dhabi now. We would like to complement that with a sizeable position globally."
ADNOC, which currently has the capacity to produce 6 million mt/year of LNG and is building two 4.8 million mt/year trains in oil-rich Abu Dhabi, is agnostic in terms of jurisdiction of LNG acquisitions.
"If there is an LNG project anywhere, east or west, that meets our investment criteria, strategic rationale and the ability to create more value by building on our strength, including trading, we will look at it," said Kaabi.
ADNOC, which has set up two trading arms, would like to capitalize on the high margins from LNG trading. ADNOC Trading is 100% owned by the parent company and ADNOC Global Trading is a joint venture with OMV and Eni.
"So, in order to create the right value for our shareholders, sometimes it is better not to be only in one part of the value chain, but to have an integrated margin including potential trading in the future, where you can improve your margins and your returns," said Kaabi.
In the Caspian region, ADNOC is looking to invest in the whole value chain of gas, leveraging its government-to-government ties, partnerships with international oil companies, and the strategic need for gas exports from the CIS region to markets such as Turkey and Europe.
ADNOC, which is acquiring a 30% stake in Absheron field to become partners with Azeri state-owned Socar and TotalEnergies, is looking to work with these companies to expand further in the region and globally.
"We have a strategy to invest in natural gas and the value chain and if [we] see an attractive value proposition to improve our returns and play constructively in the consortium, we will explore it," said Kaabi.
https://report.az/en/energy/adnoc-ready-to-invest-in-whole-value-chain-of-gas-in-caspian-sea/