Japan's Osaka Gas signs long-term deal to buy up to 800,000 mt/year LNG from ADNOC

Japan's Osaka Gas said Aug. 6 it has signed a long-term heads of agreement with Abu Dhabi National Oil Company for the delivery of up to 800,000 mt/year of LNG on an ex-ship basis, marking the first long-term LNG deal between the two companies.

The LNG will be primarily sourced from the Ruwais LNG project, which is currently under development in Al Ruwais Industrial City, Al Dhafra, Abu Dhabi and expected to start commercial operations in 2028.

An Osaka Gas spokesperson declined to specify the exact duration of the supply period and the contractual terms, including a pricing basis and destination restrictions, other than saying the contract spans a long-term period from the late 2020s.

The Osaka Gas spokesperson, however, described the deal as a result of the company's overall consideration of "favorable contractual terms and conditions" being offered, noting the need for LNG as a key transition fuel for achieving carbon neutrality.

Following the agreement, Osaka Gas said it will work with ADNOC to conclude a detailed sale and purchase agreement in the coming months based on the terms of the HOA.

Under the agreement, LNG cargos will be shipped to the destination ports of Osaka Gas and its Singapore-based subsidiary, Osaka Gas Energy Supply and Trading (OGEST).

The deal comes after ADNOC said July 10 that Japan's Mitsui alongside BP, Shell and TotalEnergies were to be awarded in the Ruwais LNG project with a 10% stake each, with the UAE's state-owned company retaining a 60% stake and serving as the lead developer and operator of the 9.6 million mt/year Ruwais LNG plant.

In a separate statement, ADNOC said the agreement with Osaka Gas brings its long-term sales commitments with international partners to 70% of the Ruwais project's total production capacity.