Mitsui & Co. is set to embark on a substantial liquefied natural gas (LNG) project in Ruwais, UAE, with a projected investment totaling several hundred million dollars, Nikkei reported. This venture, in collaboration with Abu Dhabi National Oil Co. (ADNOC) and other global energy firms including Shell, BP, and TotalEnergies, represents a significant move to enhance LNG infrastructure against a backdrop of fluctuating global energy demands.
The project, valued at $7 billion, is slated to commence operations between the late 2020s and 2030, aiming to produce approximately 10 million tonnes of LNG annually. This capacity is notable as it covers about 15% of Japan’s yearly LNG demand. Mitsui’s involvement entails a 10% investment stake, with ADNOC covering 60%.
Strategically located in the western UAE, the Ruwais facility is poised to serve key markets in Europe and Asia, potentially including Japan. This initiative is particularly timely as European nations seek alternatives to Russian LNG amid ongoing geopolitical tensions, underscored by the conflict in Ukraine.
The construction of the project will involve major players such as JGC Holdings from Japan and Technip Energies from France. Upon completion, the LNG produced is expected to cater to the growing demands in Europe and Asia, with Germany and China among the confirmed buyers.
This project aligns with the broader strategy of Japanese trading houses expanding their LNG activities globally, moving from traditional areas in the Middle East to new regions including the U.S., Russia, and East Africa. Despite some concerns about the long-term demand for LNG due to global decarbonization efforts, the current geopolitical landscape and policy shifts, such as the U.S. halting new LNG export approvals, have spotlighted Middle Eastern LNG as a crucial energy source for the foreseeable future.
