Shell, bp, TotalEnergies, more join ADNOC’s $5.5 billion Ruwais LNG project

(Bloomberg) – Four international companies have agreed to invest in Abu Dhabi National Oil Co.’s (ADNOC) next liquefied natural gas (LNG) export project, according to people with knowledge of the matter.

Shell Plc, TotalEnergies SE, bp Plc and Mitsui & Co. will each take a 10% stake in the Ruwais LNG plant, said the people, who asked not to be named as the information isn’t public. Agreements may be signed as soon as next week, the people said.

Representatives for ADNOC, Shell and TotalEnergies declined to comment. bp didn’t respond to a request for comment, and a spokesperson for Mitsui said that no decision has been made.

By investing in Ruwais, the energy majors are betting on long-term demand for natural gas even though many countries intend to switch to greener alternatives. While fuel prices have eased from the stratospheric heights reached two years ago, they remain elevated, boosting the appeal of new supply projects.

The UAE currently has just 5.8 million tons of LNG export capacity, the smallest of the region’s producers. The 9.6-million-ton-per year Ruwais plant will boost its capacity to the second-largest in the Middle East behind only Qatar.

ADNOC decided to proceed with the Ruwais project and signed a $5.5 billion contract for its construction before securing investments from the four international companies. Three of them — Mitsui, bp and TotalEnergies — are also partners in the UAE’s only existing LNG export plant located on Das Island.

The project is part of the UAE’s push into global LNG markets both at home and abroad. ADNOC recently signed deals to invest in similar projects in the U.S. and Mozambique. Gas is one of several areas ADNOC has decided to focus its investment on as part of its deal-making spree.

“We’ve made it very clear that we’re interested in key sectors when it comes to low carbon solutions, renewables, natural gas and chemicals,” Musabbeh Al Kaabi, ADNOC’S executive director for international growth, said in an interview in May.