UAE's ADNOC Gas cancels Das Island expansion project

The UAE’s ADNOC Gas suspended expansion operations at its Das Island LNG export facility, a company spokesperson confirmed in an email to S&P Global Commodity Insights on Oct. 8.

The LNG 2.0 project aimed to electrify LNG trains to reduce GHG emissions, debottleneck LNG trains, and extract and export ethane at Das Island, adding 1.2 million metric tons per annum of ethane, 0.9 MMtpa of LNG and 1.1 MMtpa of C3+ by 2028. The three-train Das Island LNG plant has a liquefaction capacity of 6 MMtpa.

“While not proceeding with the LNG2.0 project, we will continue to invest in Das Island, particularly as it remains a key asset in our LNG portfolio,” the statement said.

According to ADNOC Gas's website, the Das Island facility, operational since 1977, is the third-longest established LNG operation globally.

The project, in the FEED stage, when scrapped, was part of the UAE's effort to boost LNG production and export. The country has invested heavily in projects as it looks to go from a net gas importer to self-sufficient by 2030.

Commodity Insights reported in 2023 that ADNOC Gas, a subsidiary of state-owned Abu Dhabi National Oil Company, plans to increase production capacity by 30% over five years and expand LNG capacity by 8.3% by 2028. This will benefit the parent company's higher oil and gas output and cater to the growing global LNG demand.

“We have a funnel of exciting opportunities in which we can invest, while at the same time exercising capital discipline,” the statement said. “ADNOC recently [in June 2024] announced FID for the Ruwais LNG facility, which will complement our portfolio, and we expect that plant to commence production in late 2028.”

The Ruwais LNG project, announced in May 2023, will be a two-train, 9.6 MMtpa liquefaction plant at Ruwais in the emirate of Abu Dhabi and is under construction.

ADNOC Gas has previously said it intends to take a majority share in the Ruwais LNG facility. In July 2024, ADNOC awarded 40% minority stakes in the Ruwais LNG project to BP, Mitsui, Shell, and TotalEnergies, with each receiving a 10% stake while ADNOC retains a 60% majority stake.

As of July, ADNOC signed 70% of the required offtake agreements for Ruwais LNG, with more to be announced, ADNOC’s executive vice president for downstream asset management, Fatema al-Nuaimi, told Commodity Insights. These include heads of agreements with Shell and Mitsui for 1 MMtpa and 0.6 MMtpa, respectively.

"This 70% figure exceeds the total volumes of the project’s six announced supply contracts to date as of August 2024, implying that the company has signed another 1.7 MMtpa of long-term agreements that have not been publicly announced," according to August analysis from Commodity Insights.

Existing agreements include those with Shell for 1 MMtpa and Mitsui for 0.6 MMtpa. Other agreements are with Germany’s EnBW and SEFE and China’s ENN. Combined, the announced contracts total 4.2 MMtpa or roughly 44% of the project’s capacity, implying contracts worth 2.5 MMtpa are still needed, according to Commodity Insights analysis.