Germany's SEFE signs three-year LNG purchase agreement with UAE's ADNOC Gas

German state-owned gas trader SEFE is to buy more than 700,000 mt of LNG over the next three years under a new agreement with the UAE's ADNOC Gas, the German company said July 10.

Deliveries are set to begin this summer, with the agreement valued at some $400 million over its three-year term, SEFE said in a statement.

The LNG will be supplied from ADNOC Gas' existing 6 million mt/year Das Island export facility and will have flexible delivery destinations to be decided "at SEFE's discretion".

The deal comes after SEFE in November last year agreed a 15-year, 1 million mt/year sales and purchase agreement (SPA) with ADNOC for LNG from its planned Ruwais LNG plant.

The two-train, 9.6 million mt/year capacity Ruwais LNG plant is currently under development in Al Ruwais Industrial City in Abu Dhabi, with SEFE announced as Ruwais LNG's first foundation buyer.

SEFE Chief Commercial Officer Frederic Barnaud said July 10 that the new medium-term LNG contract builds on the long-term supply agreement with ADNOC signed last year.

"It adds another flexible source of LNG to our portfolio -- to the benefit of both Europe's security of supply and our global market trading activities," Barnaud said.

ADNOC Gas CEO Fatema Al Nuaimi said the latest agreement strengthened its partnership with SEFE.

She also said it "reinforces ADNOC Gas' role as a reliable global energy provider and our commitment to supporting energy security and sustainability in Europe."

The agreement also builds on the ongoing strategic collaboration between the UAE and Germany, including the 2022 Energy Security and Industry Accelerator (ESIA) pact and the 2024 Joint Declaration with the state of Baden-Wurttemberg.

LNG contracting

SEFE is a key German importer and was formerly a unit of Russia's Gazprom before it was nationalized by the German government after Moscow's invasion of Ukraine in 2022.

SEFE has become increasingly active in term contracting for LNG and pipeline gas supplies in recent years as part of efforts to replace Russian gas imports lost from its supply portfolio.

Most recently on July 9, SEFE agreed to buy an additional 0.75 million mt/year of LNG from Venture Global's planned CP2 export project in Louisiana.

The expanded sale and purchase agreement brings SEFE's purchase commitments to CP2 to about 3 million mt/year, building off a deal for 2.25 million mt/year signed in 2023.

In March, SEFE also reached a preliminary 15-year deal with US LNG developer Delfin for the purchase of some 1.5 million mt/year of LNG to be sourced from Delfin's planned floating LNG ships offshore Louisiana.

In December 2024, SEFE agreed to a new LNG supply deal with Angola LNG for the delivery of 0.5 million mt of LNG in 2026 -- the equivalent of eight LNG cargoes.

And in March 2024, SEFE also signed a final sales and purchase agreement with Oman LNG for the supply of 0.4 million mt/year of LNG over 2026-29.

Pipeline gas

For pipeline gas, SEFE agreed in June a new 10-year deal with Azerbaijan's Socar to import up to 15 TWh/year (1.5 Bcm)/year of gas, with deliveries under the contract set to begin this year.

The gas will come from Socar's portfolio and be delivered into Italy via the TAP pipeline.

SEFE also signed in October last year a deal to purchase up to 9 Bcm of gas over the next 10 years from the US' ConocoPhillips under a new long-term gas partnership between the two companies.

Before that, it also signed a giant gas import deal with Norway's Equinor in December 2023 for the purchase of 111 TWh/year (10 Bcm/year) of gas for the 2024-2034 period.

The new deals come as spot gas prices in Europe remain relatively high.

Platts, part of S&P Global Energy, assessed the benchmark Dutch TTF month-ahead price on July 9 at Eur34.60/MWh.