ADNOC Gas Announces $550 Million Investment in UAE Gas Infrastructure Expansion

ADNOC Gas announced a strategic move to optimize capital efficiency. They awarded EPC contracts valued at $550 million for the next phase of the UAE's gas pipeline expansion project, ESTIDAMA. While ADNOC Gas will manage the project, ownership is being transferred to ADNOC, allowing ADNOC Gas to focus its resources. This project will extend the pipeline network by over 300 kilometers, enabling them to deliver natural gas to more customers in the Northern Emirates.

The EPC contracts, totaling $550 million (AED2 billion), have been awarded to NMDC Energy P.J.S.C and Galfar Engineering & Contracting W.L.L Emirates. These contracts represent a significant investment in the UAE's economy, with approximately 70% of their value expected to circulate through ADNOC's In-Country Value (ICV) program. This initiative not only supports local economic growth and diversification but also reinforces ADNOC's commitment to fostering sustainable development and strengthening the UAE's industrial capabilities through strategic partnerships with key local players in the energy sector.

ESTIDAMA will oversee the expansion of ADNOC Gas's natural gas pipeline network in the UAE, extending it from around 3,200 kilometers to over 3,500 kilometers. This expansion aims to enhance the capacity for transporting higher volumes of natural gas to customers in the Northern Emirates. ADNOC Gas, following the transfer of ownership to ESTIDAMA, will retain operational management, leveraging its expertise in construction and pipeline operations. ADNOC will finance the capital expenditures required for this vital infrastructure project, reinforcing its commitment to supporting the UAE's energy infrastructure development and ensuring reliable gas supply across the region.

Dr. Ahmed Alebri, CEO of ADNOC Gas, underscored the strategic importance of the award received, highlighting its pivotal role in advancing the UAE's extensive gas pipeline network. The expansion initiative aims to ensure broader accessibility to cost-effective and sustainable natural gas across the nation, aligning closely with the UAE's ambitious goals of achieving gas self-sufficiency. Alebri expressed profound satisfaction in ADNOC's leadership position in meeting escalating gas demands, emphasizing the critical role played in enhancing energy security and economic resilience. With the transfer of the ESTIDAMA Project's ownership to ADNOC, he reaffirmed the company's commitment to optimizing capital efficiency. This strategic move not only supports the ongoing expansion of pipeline infrastructure but also underscores ADNOC's dedication to maximizing value for its shareholders through prudent operational management and strategic infrastructure investments.

Under the arrangement with ESTIDAMA, ADNOC Gas plans to further develop its local operations, operating under a framework where ADNOC receives a variable transmission fee based on the actual throughput of the expanded pipeline network. ADNOC Gas will be compensated for managing and maintaining ESTIDAMA on behalf of ADNOC, ensuring efficient operations and upkeep of the extended natural gas infrastructure. This partnership underscores ADNOC's strategic approach to expanding its energy network while optimizing operational efficiencies and ensuring robust service delivery to customers in the Northern Emirates.