Adnoc has agreed to supply China with 200,000 barrels of crude daily for two decades.
Abu Dhabi agrees to supply China with 200,000 barrels of oil a day
Abu Dhabi has agreed to increase oil exports to China to 200,000 barrels daily.
Abu Dhabi National Oil Company, a government-owned entity, will provide more crude to the state-owned China National Petroleum Corporation (CNPC) starting in 2014, according the UAE state news agency WAM. The emirate already exports oil to China, but yesterday's report from WAM did not specify how much.
The deal follows a 2009 agreement between the two companies to cooperate on oil trading, shipping and storage.
China, the world's fastest-growing oil market, is seeking to meet oil demand that is projected by the International Energy Agency to rise by 6 per cent this year. That would translate into nearly 570,000 barrels per day (bpd) of demand on top of last year's 9.39 million bpd.
China has invested in drilling in risky nations such as Sudan while courting major suppliers such as Saudi Arabia. In 2009, the kingdom nearly doubled exports to China over the previous year, for the first time sending more oil to China than to the US.
China has sought to strengthen its relationship with producers through projects in the Middle East, including cooperation with Saudi Aramco on refineries in the kingdom and a US$218 million (Dh800.7m) contract to supply oil rigs to Abu Dhabi. CNPC also won the contract to build a strategic UAE pipeline to funnel Abu Dhabi crude to the Fujairah coast, allowing about half of the emirate's crude exports to bypass the Strait of Hormuz.
China and the UAE have approached each other on other fronts. The UAE Central Bank is considering holding some of its foreign currency assets in Chinese yuan, which would make it the first central bank to do so in a dollar-dominated region. The move would also allow more trade and investment between the two nations.
Other sectors are reaping the benefits of the countries' increasingly warm relations, with the number of Chinese visitors to Dubai expected to grow by more than half this year.
Last year, the emirate recorded 152,000 visitors from China, according to the Dubai Department of Tourism and Commerce Marketing.
Meanwhile construction contracts awarded to Chinese companies, including for work on the Abu Dhabi-Fujairah oil pipeline, have totalled $4.8 billion in the past two years. China is now the UAE's second-largest trading partner.