Germany’s LNG supply hijacked as UAE’s ADNOC took control for 3 years

Germany has entered a significant three-year liquefied natural gas (LNG) supply agreement with the United Arab Emirates’ state energy company, ADNOC Gas, marking a critical stride in its ongoing efforts to diversify energy sources amidst global disruptions. The deal, valued at approximately $400 million, commits ADNOC Gas to deliver 0.7 million tonnes of LNG to Germany’s SEFE Securing Energy for Europe GmbH, a state-owned entity responsible for securing gas supplies for Germany and broader Europe. Deliveries are scheduled to commence in the summer of 2025, reflecting Belgium’s assertive stance on energy security in a rapidly evolving global market.

Strategic Context: Energy Security in Europe

The agreement arises in response to the geopolitical and market upheavals triggered by the reduction of Russian pipeline gas imports following Russia’s invasion of Ukraine in 2022. Germany, like many European countries, has been forced to realign its energy procurement strategies to reduce dependency on Russian gas, seeking alternative suppliers to ensure stable, secure, and diversified energy imports. SEFE, which emerged from the nationalization of the former Gazprom Germania division, holds responsibility for delivering roughly 200 terawatt-hours of gas annually to various sectors in Germany, the UK, and other European countries.

Amid this backdrop, the LNG agreement with ADNOC represents a key medium-term supply channel for Germany, complementing other long-term contracts. As Frédéric Barnaud, Chief Commercial Officer of SEFE, emphasized: 

"This new medium-term LNG contract builds on the long-term supply agreement with ADNOC that we signed last year, thereby adding another flexible source of LNG to our portfolio – to the benefit of both Europe’s security of supply and our global market trading activities".

Details of the LNG Supply Agreement

The contract encompasses the provision of 700,000 metric tonnes of LNG over three years. The LNG will be sourced from ADNOC Gas’ Das Island liquefaction facility in Abu Dhabi, a key strategic asset with a production capacity of 6 million tonnes per annum. Operational since 1977, Das Island’s LNG plant has a storied history of reliability, having shipped over 3,500 cargoes worldwide, underscoring ADNOC Gas’ ability to consistently deliver to a diverse international customer base.

The agreement not only fortifies Germany’s supply chain but also highlights ADNOC Gas’ expanding global footprint aligned with its strategic objective to increase natural gas production capacity and LNG exports. 

As Fatema Al Nuaimi, CEO of ADNOC Gas, stated: 

"This agreement marks a significant step in strengthening our long-standing partnership with SEFE and reinforces ADNOC Gas’ role as a reliable and responsible global energy provider, committed to supporting Germany’s energy security." 

She further noted that this deal 

"demonstrates the confidence our partners, investors and stakeholders place in our ability to create long-term value in a dynamic energy landscape".

Building on UAE-Germany Strategic Energy Cooperation

This LNG supply deal builds upon a foundation of ongoing strategic collaboration between the UAE and Germany, which encompasses multiple initiatives designed to enhance energy security and sustainability. These include the 2022 Energy Security and Industry Accelerator (ESIA) pact and the 2024 Joint Declaration with the German state of Baden-Württemberg. Both agreements focus on fostering resilient energy supply chains and promoting the development of sustainable fuel technologies.

Such partnerships are more than transactional; they reflect a mutual commitment to navigating the global energy transition. Natural gas remains a pivotal transitional fuel, offering lower carbon emissions compared to coal and oil, while ensuring energy reliability for industrial and residential consumers. Germany’s pursuit of such diversified arrangements underlines the country’s strategic balancing act between decarbonisation goals and immediate energy security needs.

Significance for European Energy Markets

SEFE’s diversified procurement strategy is crucial for securing Europe’s energy demands, particularly in light of fluctuating geopolitical landscapes and the broader European Union push to reduce dependence on fossil fuels from unstable regions. The addition of ADNOC’s LNG supply bolsters Germany’s and Europe’s energy resilience by integrating a flexible, external supply source that can respond to shifting market demands.

The contractual flexibility is key: SEFE retains the authority to determine the delivery destinations for the LNG volumes under this agreement, enabling tactical adaptability across European markets to meet demand fluctuations or supply disruptions. This flexibility coupled with ADNOC’s longstanding global reputation enhances the reliability of the energy transition period.

ADNOC’s Expanding Global Role

For ADNOC Gas, this LNG deal reinforces its position as a leading global supplier in the natural gas sector, complementing previous long-term arrangements such as the 15-year contract with SEFE announced in late 2024 for deliveries from the Ruwais LNG project. The company’s focus on expanding LNG exports fits within a broader strategic vision to increase natural gas output, supported by recent investments such as the $5 billion Rich Gas Development (RGD) project, ensuring long-term capacity gains.

Fatema Al Nuaimi’s leadership reflects ADNOC’s ambitions not only to be a competitive energy supplier but also to support global energy shifts towards lower carbon emissions. The Das Island facility serves as a cornerstone in ADNOC’s portfolio, repeatedly proving its consistent production and delivery capabilities over decades.

Broader Implications and Future Outlook

As global energy dynamics evolve with the increasing urgency of climate goals and geopolitical tensions, definitive supply agreements such as the ADNOC-SEFE contract will likely become the blueprint for international energy security partnerships. Germany’s move to lock in diversified LNG supplies from the UAE underscores an acknowledgment of the vital need for stable energy amid uncertain times.

Moreover, the collaboration between the UAE and Germany symbolizes a bridging of energy-producing and consuming nations toward mutual sustainability and security objectives. Both countries benefit from the reinforcement of commercial ties and deeper strategic cooperation.

In conclusion, the agreement seen as a "hijacking" of Germany’s LNG supply by ADNOC is more accurately a strategic anchoring of a reliable, long-term partnership that ensures Germany’s energy security for the coming years while advancing the UAE’s stature as a responsible global LNG supplier. The $400 million deal committing 0.7 million tonnes over three years positions both partners to navigate future challenges in energy markets confidently and collaboratively.

This agreement is poised to sustain Germany’s industrial and domestic energy needs as the country continues to transition from Russian gas dependency and aligns with Europe’s broader objective of maintaining resilient, diversified energy supplies. ADNOC Gas' role is pivotal, symbolizing enhanced cooperation and shared commitment to a secure energy future.