ABU DHABI - LPG Exports.

ADNOC sales of LPG have increased considerably in the past seven years. The capacity to produce LPG from onshore and offshore associated gas and from the LNG complex on Das island has risen to 4.75m t/y, from about 3.93m t/y in 1994. A further increase will be expected by end-2001.

ADNOC's onshore gas processing JV, Abu Dhabi Gas Industries Co. (GASCO), is expanding its capacity to produce 6m t/y of ethane, LPG and NGLs. GASCO also has the capacity to produce 2.12m t/y of pentane-plus, which is expected to expand as well. ADNOC's JV Abu Dhabi Gas Liquefaction Co. (ADGAS), markets the LNG it produces on Das island. In co-ordination with ADNOC, the majority partner, it also markets LPG and sulphur produced by the LNG complex. The capacity to produce LNG on Das island has more than doubled. Its nominal capacity in late 1994 reached about 4.9m t/y. But the actual production of LNG averages almost 5.3m t/y. The surplus LPG is being sold on spot basis by ADGAS (see Gas Market Trends).

Like Kuwait's KPC and others, ADNOC and its foreign partners prefer term deals for LPG. They price term LPG in line with Saudi Aramco's CP formula which, since October 1994, has often been higher than spot market prices. The CP formula has since earned ADNOC and foreign partners additional income. ADNOC and foreign partners are selling surplus LPG on the spot markets east and west of Suez. ADNOC and its term customers have the option of lowering or raising liftings by 10% of the contracted volumes.