Abu Dhabi National Oil Company (ADNOC) and Germany’s RWE Supply & Trading have signed a Letter of Intent (LOI) to enter negotiations for up to two long-term Liquefied Natural Gas (LNG) Sale and Purchase Agreements (SPAs), it is reported.
The LOI was signed on the occasion of a state visit to Germany by UAE President Sheikh Mohamed bin Zayed Al Nahyan, according to reports. It is understood to be a follow-up measure to the Strategic Collaboration Agreement signed between ADNOC and RWE in February 2026, marking a further expansion of energy cooperation between the two companies.
The LOI covers negotiations for up to two long-term LNG SPAs, with supply reported to be targeted to begin in the early 2030s. For reference, an existing long-term contract between ADNOC Gas and a German customer is reported at approximately 1.6 million tonnes per annum (MTPA), an amount said to be sufficient to supply roughly 3.5 million German households.
Germany has continued policies to diversify its LNG import sources as it moves away from dependence on Russian gas, and this LOI is reported to be part of that effort to expand procurement of UAE-sourced LNG.
This LOI illustrates a broader trend of Germany and other European countries seeking to expand long-term procurement of Middle Eastern LNG as they move away from dependence on Russian pipeline gas. For ADNOC, the move can be interpreted as a strategy to secure export volumes to Europe ahead of time, in tandem with capacity expansion projects such as Ruwais LNG. Long-term SPAs typically provide both price stability and supply predictability to both parties, so should this negotiation lead to a formal contract, the share of Middle Eastern volumes in the European LNG market is expected to grow further. At the same time, the move can be read as ADNOC seeking to expand its market share in Europe amid competition with other major LNG exporters such as the United States and Qatar. This trend toward long-term supply agreements could also serve as an incentive for further investment in LNG liquefaction and transport infrastructure, with some observing potential indirect effects on related EPC contractors and shipbuilders.
A primary point to watch is when the LOI converts into a formal long-term SPA and what the final contracted volume will be. It also remains to be confirmed whether the supply will be sourced from ADNOC’s existing production facilities or from expanding new projects such as Ruwais LNG. Whether Germany signs similar long-term contracts with other Middle Eastern or US suppliers, and whether this cooperation expands beyond LNG into other energy areas such as hydrogen, are also worth monitoring.