Adnoc Gas awards $550 million contracts to expand UAE gas infrastructure
Source：Khaleej Times
From：Taiwan Trade Center, Dubai
Update Time：2024/08/29
Adnoc Gas PLC announced the award of engineering, procurement and construction (EPC) contracts for the next phase of the UAE sales gas pipeline network enhancement "Estidama Project".
Separately, ownership of Estidama is being transferred from Adnoc Gas to Adnoc, thereby significantly optimising Adnoc Gas' capital efficiency.
The EPC contracts are worth a combined $550 million (Dh2 billion) and were awarded to NMDC Energy P.J.S.C and Galfar Engineering & Contracting W.L.L Emirates.
Approximately 70 per cent of the contracts' value is expected to flow back into the UAE economy through Adnoc's In-Country Value (ICV) programme, supporting local economic growth and diversification.
ADNOC’s comprehensive gas strategy includes the construction of a world class pipeline network that links all parts of the UAE’s gas system and ensures a sustainable and economical supply of natural gas to meet local demand.
The ESTIDAMA pipeline project comprises several packages with a total value of $2.4 billion, with the first contract awarded in 2021 and completed in 2023, delivering early modification works on existing pipelines. In July 2023, the second and third ESTIDAMA EPC contracts were awarded at a combined value of $1.34 billion, which includes the construction of new pipelines and a gas compression plant at ADNOC’s Habshan complex, enabling the delivery of essential feed gas to key customers across the UAE.
ADNOC Gas remains committed to managing and delivering ESTIDAMA while progressing with its other significant growth projects. The Company plans to invest more than $13 billion in domestic and international growth opportunities between 2024 and 2028, with its predictable margin business expected to grow EBITDA by up to 40% over that period.
Estidama will extend the UAE's natural gas pipeline network operated by Adnoc Gas from approximately 3,200km to over 3,500km, enabling the transportation of higher volumes of natural gas to customers in the northern Emirates of the UAE.
Following the ownership transfer, Adnoc Gas will continue to manage ESTIDAMA, leveraging its expertise in construction and pipeline operations, with Adnoc covering the capital expenditures for this critical infrastructure project.
Dr. Ahmed Alebri, CEO of ADNOC Gas, emphasized, “This award underscores our commitment to expanding UAE’s gas infrastructure, enhancing accessibility to sustainable natural gas across the nation. With ADNOC assuming ownership, ADNOC Gas remains focused on operational excellence and maximizing shareholder value.”
Adnoc Gas will continue to expand its domestic business through Estidama, paying Adnoc a variable transmission fee for actual throughput of the pipeline. Adnoc Gas will also be paid to operate and maintain Estidama on behalf of Adnoc.
Source: https://www.khaleejtimes.com/uae/adnoc-gas-awards-550-million-contracts-to-expand-uae-gas-infrastructure