UAE's ADNOC forms new gas company as it seeks to expand internationally

Abu Dhabi National Oil Co. has formed a new gas company, merging its gas and LNG joint ventures with international oil companies, as the UAE's biggest energy company seeks to expand globally as well as list a minority stake of the entity on the local stock exchange.

ADNOC Gas, formed on Jan. 1, will combine the gas processing, operations and marketing of ADNOC Gas Processing and ADNOC LNG, the parent company said in a Jan. 10 statement.

"Natural gas will be a critical fuel in the energy transition and ADNOC Gas, through its world-scale operations and significant growth and expansion plans, will be well-positioned to meet both local and international gas demand," said ADNOC CEO Sultan al-Jaber in the statement. "In addition to enabling the growth of local industry and manufacturing, ADNOC Gas will play a critical role in delivering ADNOC's broader LNG expansion plans, including in international markets."

ADNOC Gas will operate eight processing sites both onshore and offshore with a pipeline network of over 3,250 km.

ADNOC plans to list a minority stake in the new company on the Abu Dhabi Securities Exchange in 2023, subject to regulatory approvals.

Expanding LNG production

ADNOC LNG counts Mitsui & Co, BP and TotalEnergies as stakeholders, alongside ADNOC's 70% interest. ADNOC LNG has capacity to produce 6 million mt/year at Das Island in emirate of Abu Dhabi. ADNOC Gas Processing has Shell, TotalEnergies and Thailand's PTTEP as stakeholders, alongside ADNOC's 68% interest.

The IOCs will continue to be part of ADNOC Gas's JV partnerships.

ADNOC, which currently has the capacity to process more than 10 Bcf/day of gas, is boosting its gas production as it seeks to help the UAE achieve self-sufficiency in the commodity.

ADNOC is in the design phase of a new a 9.6 million mt/year LNG export plant in the eastern emirate of Fujairah that will raise its LNG production capacity to 15.6 million mt/year.

"The new company will be more agile, better able to respond to changing market demands, and well-positioned to take advantage of strategic opportunities for future growth," said ADNOC. "This includes the delivery of critical capital growth projects that will increase the company's gas processing capabilities and its intended growth in LNG."

Clean energy agenda

ADNOC is pushing a clean energy agenda as it seeks to reach net zero Scope 1 and Scope 2 emissions by 2050.

The UAE, which is hosting UN Climate Change Conference COP28 in 2023, was the first country in the Gulf region to announce plans for net zero emissions by 2050.

Officials from the UAE, OPEC's third biggest member in production terms, have reiterated their intent to be a low-cost, low-carbon hydrocarbons producer as long as there is global demand for oil and gas.

ADNOC is boosting its gas output while at the same time ramping up its oil production capacity.

ADNOC is spending $150 billion between 2023 and 2027 on projects that include an oil production ramp-up, allowing the company to have the capacity to pump 5 million b/d by 2027 from over 4 million b/d now.

The spending plan is higher than the previous $127 billion capex for 2022-26.