India and UAE ink deals for LNG and oil exploration

Five agreements on energy were signed during a visit by Abu Dhabi’s crown prince to New Delhi

India on Monday signed five agreements with the energy-rich United Arab Emirates (UAE) during a visit by Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan to New Delhi.

According to an Indian Foreign Ministry statement, the pacts include one for a long-term liquefied petroleum gas (LPG) transfer between the Abu Dhabi National Oil Company (ADNOC) and the Indian Oil Corporation Limited (IOCL). The 15-year agreement will see the supply of 1 million metric tonnes per annum (MMTPA) from the ADNOC’s Ruwais gas hub.

Notably, this is the third contract of its kind that India has signed with the UAE. In 2023, the two countries agreed a 14-year deal, estimated at $7-9 billion, for the supply of 1.2 MMTPA. In January 2024, the Gas Authority of India (GAIL) signed a separate deal for a ten-year term beginning in 2026 for supplies of LNG from ADNOC.

ADNOC also signed a framework agreement with Indian Strategic Petroleum Reserve Limited, a state-controlled entity responsible for maintaining the country’s strategic petroleum reserves, to expand an existing oil storage agreement, according to S&P Global’s analytical note. S&P noted that ADNOC is currently the only overseas company that stores oil at India’s caverns.

It was a delight to welcome HH Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi. We had fruitful talks on a wide range of issues. His passion towards strong India-UAE friendship is clearly visible. pic.twitter.com/yoLENhjGWd

— Narendra Modi (@narendramodi) September 9, 2024

The two counties have also signed a production concession agreement for Abu Dhabi Onshore Block 1 around Ruwais, integrated refining and petrochemicals hub. The bloc is said to include already discovered but undeveloped conventional oil and gas fields.

ADNOC awarded exploration rights for the bloc to a consortium of two Indian oil companies, Bharat Petroleum Corporation Ltd. and Indian Oil Corporation Ltd., for a term of 35 years, back in 2018. The production agreement signed on Monday is the first such deal for any Indian company operating in the UAE, S&P noted.

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Another agreement was signed between the Nuclear Power Corporation of India Limited (NPCIL) and the Emirates Nuclear Energy Company (ENEC), providing the framework for operation and maintenance of the UAE’s first nuclear power plant, the Barakah NPP, by India.

The UAE is a key trading partner for India in the gulf region. Notably, the two nations signed the Comprehensive Economic Partnership Agreement (CEPA) in 2022 after just 88 days of negotiations. However, the pact is likely to be reviewed amid concerns raised by Indian industry over a “sharp increase in imports of precious metals from the UAE,” Reuters has reported on Monday, citing unnamed sources familiar with the matter.

The visit of Abu Dhabi’s crown prince to New Delhi was his first. At the same time, Indian Prime Minister Narendra Modi has visited the Gulf nation, home to around 3.5 million people of Indian origin, around seven times since he became prime minister. His most recent visit was in February this year.

“The two leaders discussed the multifaceted India-UAE relations and avenues to broaden the comprehensive strategic partnership to new and emerging areas,” a spokesperson for India’s Foreign Ministry posted on X (formerly Twitter). Writing on X, Modi said that the crown prince’s “passion towards strong India-UAE friendship” is “clearly visible.”