Eni in talks to speed up gas projects with UAE's ADNOC amid higher market demand

Eni is in talks with the UAE's Abu Dhabi National Oil Co. to speed up the development of gas projects in OPEC's third-biggest producer amid high global demand for gas, the Italian major said on Sept. 12.

Eni CEO Claudio Descalzi met with ADNOC CEO Sultan al-Jaber in Abu Dhabi on Sept. 12 to discuss progress and the fast-tracking of joint projects in the UAE, the Italian company said in a statement.

The talks were aimed at accelerating "the existing development project and the time-to-market of new exploration discoveries and international activities, in line with the common decarbonization strategy and with the purpose to contribute to increasing worldwide gas supply," Eni said.

Eni mentioned two projects in the UAE that can be fast-tracked, including the Ghasha sour gas development, which "is estimated to hold significant recoverable gas," and the recent discovery in Offshore Block 2 off Abu Dhabi. Eni didn't disclose any timelines for fast-tracking the projects.

The Ghasha concession, the world's largest offshore sour gas development, includes four artificial islands that have been completed, according to ADNOC. Production from Ghasha is expected to start around 2025 and ramp up to reach more than 1.5 Bcf/d before the end of the decade, ADNOC has previously said.

The Ghasha concession comprises the Hail, Ghasha, Hair Dalma, Satah, Bu Haseer, Nasr, SARB, Shuwaihat and Mubarraz fields. ADNOC's partners in the Ghasha concession are Eni (25%), Germany's Wintershall Dea (10%), Austria's OMV (5%), and Russia's Lukoil (5%).

Offshore Block exploration

Descalzi "also illustrated fast-track development options for the recent significant gas discovery in its first exploration well drilled in Offshore Block 2 Abu Dhabi, leveraging the other projects currently under execution as well as utilizing existing ADNOC facilities with the aim to optimize costs and accelerate common production targets," Eni said.

Eni has a 70% stake and is operator of Offshore Block 2, with partner PTTEP of Thailand holding the remaining interest.

Eni made an additional "significant" gas discovery in Offshore Block 2, taking the total gas in place at the asset to between 2.5 Tcf and 3.5 Tcf, it said in a July 29 statement.

New exploration drilling in a deeper zone of Offshore Block 2 found 1-1.5 Tcf of raw gas in place, Eni said at the time.

Eni and PTTEP won the concession for Offshore Block 2, which spans an area of 4,033 sq km northwest of Abu Dhabi, in 2019 as part of ADNOC's competitive bidding round.

Eni is the operator of three exploration concessions in the UAE and has a participation with state-owned ADNOC in three offshore development and production concessions, Lower Zakum (5%), Umm Shaif and Nasr (10%) and Ghasha (25%).

As part of its active upstream activity, ADNOC is forging ahead with an expansion of its hydrocarbons and low-carbon businesses under a plan to spend $127 billion over 2022-2026.

The $127 billion capex, approved last year, will allow ADNOC to expand its upstream production capacity and downstream portfolio as well as its low carbon fuels business and clean energy ambitions. ADNOC also plans to ramp up its production of LNG.

Last year, ADNOC announced an increase in national reserves of 16 Tcf of natural gas, bringing the UAE's gas reserves to 289 Tcf.

The UAE, which is boosting exploration and production of its gas reserves in order to achieve self-sufficiency of the commodity, also has pledged to have net zero emissions by 2050.