Japanese trading house Mitsui & Co is in talks to participate in a $7 billion liquefied natural gas (LNG) project in the United Arab Emirates, according to a report by Nikkei on April 23rd, 2023. The project is being led by Abu Dhabi National Oil Company (ADNOC), which would hold a majority stake of around 60%. Mitsui's investment is estimated to be in the range of several tens of billions of yen, translating to a roughly 10% stake in the project.
The project, located at Ruwais, is also expected to attract investments from other energy giants including Shell, BP and TotalEnergies. The Nikkei report suggests the aim is to produce about 10 million metric tons of LNG per year.
This collaboration aligns with Mitsui's long history of involvement in Abu Dhabi's energy sector, particularly Liquefied Natural Gas. The company has been developing and managing LNG projects with ADNOC since the 1970s.
Confirmation from Mitsui is still pending. On the day the Nikkei report emerged, a Mitsui spokesperson stated that no decision had been reached regarding the LNG project.
The UAE has emerged as a key player in the global LNG market, with ADNOC expanding its LNG production capacity in recent years. This collaboration with Mitsui and other potential partners reflects this ambition. The UAE is strategically located to serve growing LNG demand in Asia, particularly in major economies like Japan.
For Mitsui, participation in the project would secure access to a significant and stable supply of LNG, a crucial fuel source for Japan. This aligns with Mitsui's broader strategy of ensuring a diversified energy portfolio to meet Japan's energy needs.
The LNG project is one of several collaborations between Mitsui and ADNOC. In December 2022, Mitsui agreed to participate in a low-carbon ammonia production project at the TA'ZIZ Industrial Chemicals Zone in Abu Dhabi. This project reflects a growing focus on cleaner energy sources, with ammonia increasingly seen as a potential alternative fuel source.
The UAE and Japan have a long history of economic cooperation, and this LNG project is likely to further strengthen this relationship. It would ensure a stable supply of LNG for Japan, while also providing ADNOC with a reliable partner for its LNG development goals.