Total Energies to buy LNG from ADNOC Gas for $1 billion

(Bloomberg) – The United Arab Emirates’ state energy company has signed a deal to supply Total Energies SE with liquefied natural gas (LNG), as Europe tries to secure more of the fuel following Russia’s invasion of Ukraine.

ADNOC Gas Plc, a listed subsidiary of Abu Dhabi National Oil Co., will provide the super-chilled fuel to the French firm under a three-year agreement running until 2025, according to a statement on Monday. Its value is expected to be between $1 billion and $1.2 billion at today’s prices, ADNOC said, without disclosing the volumes involved.

The LNG will “be delivered to various export markets around the world,” ADNOC said.

European gas prices have plummeted this year after surging following Russia’s attack and decision to cut supplies to Europe in retaliation against sanctions. But at almost €40 a megawatt-hour, they’re still above historical averages and many analysts predict they will rise ahead of Europe’s next winter.

The continent has bought more LNG from the U.S. and piped gas from Norway in the past year. Officials from European Union states have also traveled extensively to gas-rich nations such as Algeria, Qatar and the UAE in an attempt to lock-in more supplies.

The UAE is spending billions of dollars to almost triple its LNG production capacity to 15 million tons annually in the next fear years.