ADNOC and Indian Oil Forge 15-Year LNG Supply Agreement Worth $1 Million Tonnes Annually

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ADNOC and Indian Oil seal Landmark LNG Deal to Bolster Global Energy Supply

Abu Dhabi national Oil Company (ADNOC) and Indian Oil Corporation Ltd. have finalized a 15-year agreement for the supply of approximately 1 million tonnes per year of liquefied natural gas (LNG). This deal builds upon a preliminary agreement and strengthens ADNOC’s position as a critical supplier within the Asian LNG market.

The agreement provides versatility, enabling LNG deliveries to any Indian port, thus bolstering the nation’s energy security and addressing its growing energy demands. By 2029, Indian Oil is projected to become a major customer of ADNOC LNG, accumulating a total intake of 2.2 million tonnes per annum from both the Das Island facility and the new Ruwais LNG project.

According to Rashid Khalfan al Mazrouei, Senior Vice President of Marketing at ADNOC, this long-term partnership signals the strong energy relationship between the UAE and India, with ADNOC through the Ruwais LNG project committed to supplying low-carbon gas to satisfy the rising global demand and power both industries and households.

The Ruwais LNG project, currently under construction in Al Ruwais Industrial City, Abu Dhabi, is expected to begin operations in 2028. Currently, over 8 million tonnes per annum of the project’s 9.6 million tonnes per annum capacity has been contracted to international customers, emphasizing the considerable global demand for lower-carbon LNG.

This agreement also underscores the benefits of the Comprehensive economic Partnership Agreement (CEPA) signed between the UAE and India in 2022, helping to promote bilateral trade and collaboration in the energy sector. Notably, the Ruwais LNG facility will be the first in the Middle East powered by clean energy and will utilize advanced technologies like artificial intelligence to enhance safety, operational efficiency and sustainability.

ADNOC Gas announced in November 2024 its plans to acquire ADNOC’s 60% stake in the Ruwais LNG project, which will be completed in the second half of 2028. Once finished, this project will more than double ADNOC Gas’ LNG production capacity, elevating it to approximately 15 million tonnes per annum.

How will the ADNOC-IOC LNG deal specifically contribute to india’s energy security goals?

ADNOC and Indian Oil: A 15-Year LNG Supply Deal – Securing India’s Energy Future

The Landmark Agreement: Key Details

On August 27, 2025, the abu Dhabi National Oil Company (ADNOC) and Indian Oil corporation (IOC) announced a significant long-term agreement: a 15-year Liquefied Natural Gas (LNG) supply deal. This agreement will see ADNOC supply Indian Oil with up to 1 million tonnes per annum (MTPA) of LNG, bolstering india’s energy security and diversifying its gas import sources. The deal underscores the growing energy partnership between the UAE and India.

Duration: 15 years, commencing in 2026.

Volume: Up to 1 MTPA of LNG.

Parties involved: ADNOC (Abu dhabi National Oil Company) and Indian Oil Corporation (IOC).

Significance: Strengthens energy ties between the UAE and India, supports India’s growing energy demand.

Why This Deal Matters for India’s Energy Landscape

India’s energy demand is rapidly increasing, driven by economic growth and a rising population. natural gas plays a crucial role in this demand, serving as a cleaner alternative to other fossil fuels and supporting the nation’s transition to a lower-carbon economy. This LNG supply agreement with ADNOC is pivotal for several reasons:

1. Enhanced Energy Security: Diversifying LNG sources reduces India’s reliance on any single supplier, mitigating risks associated with geopolitical instability or supply disruptions.
2. Meeting Growing Demand: The 1 MTPA supply will contribute considerably to meeting India’s escalating natural gas requirements across various sectors, including power generation, fertilizers, and industrial applications.
3. Supporting India’s Gas-Based Economy: The Indian government is actively promoting the use of natural gas in its energy mix. This deal aligns with that strategy, fostering the development of a robust gas infrastructure and market.
4. Price Stability: Long-term contracts like this often provide more predictable pricing,shielding Indian consumers from volatile spot market fluctuations in LNG prices.

ADNOC’s Role and Global LNG Market Dynamics

ADNOC is a major player in the global LNG market, and this agreement reinforces its position as a reliable supplier. The company has been actively expanding its LNG production capacity to meet growing global demand.

ADNOC’s LNG Capacity: ADNOC currently has an LNG production capacity of around 6.5 MTPA, with plans to significantly increase this in the coming years.

Global LNG Trends: The global LNG market is experiencing robust growth, driven by increasing demand from Asia, particularly China and India.

Competition: Key LNG suppliers include Qatar, Australia, the United States, and Russia. This deal highlights ADNOC’s competitiveness in securing long-term supply agreements.

Impact on Indian Oil Corporation (IOC)

For Indian Oil, this agreement represents a strategic move to secure a stable and reliable supply of LNG. IOC is India’s largest commercial enterprise and a major consumer of natural gas.

IOC’s LNG Portfolio: This deal adds to IOC’s existing LNG portfolio, which includes long-term contracts with other suppliers like QatarEnergy and exxonmobil.

Downstream Benefits: The secured LNG supply will support IOC’s operations in petrochemicals, fertilizers, and city gas distribution.

Investment in Infrastructure: IOC is investing heavily in LNG regasification terminals and pipeline infrastructure to facilitate the increased import and distribution of natural gas.

Implications for the India-UAE Energy Partnership

The ADNOC-IOC LNG deal is a testament to the strengthening energy partnership between India and the United Arab Emirates. This collaboration extends beyond LNG to include investments in oil storage, renewable energy, and other energy-related projects.

Strategic Alliance: the UAE is a key energy partner for india, providing a significant portion of its crude oil and LNG imports.

Joint Ventures: Both countries are exploring joint ventures in various energy sectors, including hydrogen production and carbon capture technologies.

Investment Flows: Increased investment flows between India and the UAE are further solidifying their energy cooperation.

LNG Pricing and Contractual Terms – A Closer Look

While the specific pricing details of the ADNOC-IOC agreement haven’t been publicly disclosed, LNG contracts typically involve a combination of factors:

Henry Hub Index: Often linked to the Henry Hub price in the United States, a benchmark for natural gas.

Slope: A percentage added to the henry Hub price to reflect the cost of liquefaction and transportation.

Delivery Point: The location where the