Abu Dhabi seeks dominance in LNG markets with $19 billion Santos acquisition

In a significant development for the global energy market, Abu Dhabi has made a strategic move to solidify its position in liquefied natural gas (LNG) through a substantial investment. The state-owned oil company, Abu Dhabi National Oil Company (ADNOC), via its investment arm XRG PJSC, has proposed a $19 billion takeover of Santos Ltd., an Australian energy firm. This initiative is not only aimed at enhancing ADNOC's existing LNG capabilities but also at tapping into the rapidly growing Asian markets that demand LNG. Analysts from Bernstein have noted that while Abu Dhabi has traditionally been reliant on oil, this acquisition signals its desire to broaden its portfolio and increase its market share in the LNG sector. Currently, Santos is expected to elevate its LNG production capacity to 7.5 million tons annually once its Barossa project becomes operational later this year. When combined with ADNOC's existing LNG production of 6 million tons and a planned 9.6 million-ton terminal, the acquisition could enable Abu Dhabi to establish itself as a competitive mid-tier global LNG supplier, equating to an estimated portfolio of 15-20 million tons per year. Should the acquisition come to fruition, it would position ADNOC alongside major industry players like Shell and ExxonMobil, marking a pivotal shift in the dynamics of the LNG market and enhancing Abu Dhabi's role in global energy supply.