IndianOil becomes ADNOC’s biggest LNG buyer as Ruwais supply ramps from 2029

Abu Dhabi National Oil Company (ADNOC) has finalized a 15-year Sales and Purchase Agreement (SPA) with Indian Oil Corporation Limited (IndianOil) for the supply of one million tonnes per annum (mtpa) of liquefied natural gas (LNG) from its lower-carbon Ruwais LNG project. The deal builds on a prior Heads of Agreement and converts it into a definitive contract, extending the strategic energy relationship between the United Arab Emirates (UAE) and India.

Under the terms, ADNOC will deliver LNG cargoes to ports across India, supporting the country’s growing demand while reinforcing its energy security. The deal further strengthens the UAE’s position as a reliable LNG supplier to Asia at a time when the region’s energy mix is shifting toward gas for both industrial and power applications.

Why does the agreement make IndianOil ADNOC’s largest LNG customer from 2029 and what does that imply for demand growth?

From 2029, IndianOil will emerge as ADNOC’s largest LNG customer, with its contracted offtake rising to 2.2 mtpa. This includes 1.2 mtpa sourced from ADNOC’s long-standing Das Island operations and the additional 1 mtpa from the new Ruwais project. For IndianOil, this represents a structural diversification of supply as the state-owned energy major balances imports between Qatar, Australia, Russia, and now the UAE.

For ADNOC, locking in a long-term Indian customer secures demand stability for its expansion projects. Analysts noted that institutional investors often favor LNG suppliers with robust long-term offtake arrangements, as these mitigate exposure to price swings in the spot market. The agreement thus provides greater revenue visibility for ADNOC’s LNG business.

How does the Ruwais LNG project fit into ADNOC’s global strategy and what capacity has already been booked?

The Ruwais LNG project, currently under construction in Al Ruwais Industrial City, Abu Dhabi, is expected to begin commercial operations in 2028. The project features two liquefaction trains, each with a capacity of 4.8 mtpa, bringing total output to 9.6 mtpa. ADNOC has already secured commitments for more than 8 mtpa of this volume through long-term SPAs with international buyers.

Institutional sentiment suggests this level of pre-booked capacity highlights strong demand for lower-carbon LNG. The market has shifted toward securing long-dated contracts, especially in Asia, after supply volatility in Europe following the Russia–Ukraine conflict. By locking in such contracts early, ADNOC positions itself as a central player in Asia’s long-term LNG import portfolio.

What makes Ruwais LNG distinct in terms of sustainability, technology, and carbon intensity compared to other global projects?

The Ruwais LNG facility is set to become the first LNG project in the Middle East to be powered entirely by clean electricity. ADNOC has emphasized that the design will ensure one of the lowest carbon intensities of any LNG plant worldwide. Advanced digital technologies, including AI-driven safety and monitoring systems, are being deployed to optimize efficiency and reliability.

For global investors who increasingly assess energy projects through ESG lenses, this low-carbon orientation makes Ruwais a more attractive option. As financial institutions shift capital toward projects with stronger sustainability credentials, ADNOC’s approach could ensure broader institutional support and favorable financing terms.

How does the deal align with broader UAE–India trade ties under the Comprehensive Economic Partnership Agreement?

The SPA is also a direct outcome of the Comprehensive Economic Partnership Agreement (CEPA) signed between the UAE and India in 2022. That agreement has been instrumental in boosting bilateral trade flows across energy, technology, and manufacturing. The LNG supply arrangement demonstrates how the CEPA framework continues to facilitate deeper energy cooperation, particularly as India aims to reduce dependence on coal and expand the share of natural gas in its primary energy mix from around 6% today to 15% by 2030.

Observers have noted that the UAE is positioning itself as a strategic partner to India not only in hydrocarbons but also in renewables and hydrogen. This LNG deal thus complements a wider energy transition partnership that extends beyond fossil fuels.

What is the financial and strategic significance of ADNOC Gas acquiring a majority stake in the Ruwais LNG project?

In November 2024, ADNOC Gas disclosed plans to acquire ADNOC’s 60% stake in Ruwais LNG at cost by the second half of 2028. This acquisition will expand ADNOC Gas’ operated LNG capacity from its current level of around 6 mtpa to nearly 15 mtpa. For shareholders of ADNOC Gas, which is listed on the Abu Dhabi Securities Exchange, the move signals significant scale-up potential and a doubling of capacity.

Institutional investors have interpreted this as a value-accretive step, providing greater control over long-term LNG supply and cash flows. Market participants generally view the acquisition as enhancing ADNOC Gas’ competitiveness against regional peers such as QatarEnergy, which dominates global LNG trade.

How are markets and institutional investors reacting to the agreement and ADNOC’s LNG growth strategy?

On the Abu Dhabi Securities Exchange, ADNOC Gas shares have seen stable trading levels in recent sessions, with sentiment buoyed by the string of SPAs announced this year. Investors see ADNOC’s LNG strategy as part of a broader reorientation toward natural gas as a “transition fuel,” providing both cleaner energy than coal and a bridge to renewables.

Institutional flows indicate that both regional and global funds have increased exposure to ADNOC-linked equities, partly on expectations of recurring cash flows from LNG exports. Analysts said the IndianOil deal in particular reflects the broader institutional preference for predictable volumes secured under long-term contracts.

What is the broader outlook for LNG demand in Asia and how does ADNOC fit into this trajectory?

Asia remains the world’s largest LNG-importing region, accounting for roughly 70% of global imports. India, alongside China, South Korea, and Japan, continues to drive structural demand growth as governments look to reduce coal dependency.

The long-term SPA with IndianOil highlights how suppliers are securing durable demand anchors in Asia. Analysts expect that ADNOC’s Ruwais project, with its low-carbon positioning, will be among the most competitive LNG plants globally once operational. For India, the arrangement diversifies sourcing away from a heavy reliance on Qatar, adding another layer of security in a volatile global market.

Going forward, ADNOC’s LNG exports are expected to rise in parallel with its decarbonization initiatives, aligning with the UAE’s 2050 net-zero ambition. For IndianOil, the deal cements a critical pillar of its import strategy, ensuring stable supply as it balances refining, petrochemicals, and retail expansion at home.