ADNOC Gas Awards $550 Million For UAE Gas Network Expansion And Customer Reach

ADNOC Gas plc has announced the awarding of engineering, procurement, and construction (EPC) contracts for the next phase of the UAE sales gas pipeline network enhancement, known as the "ESTIDAMA Project." The EPC contracts, valued at a combined $550 million (AED2 billion), have been awarded to NMDC Energy P.J.S.C and Galfar Engineering & Contracting W.L.L Emirates.

Approximately 70% of the contracts' value is anticipated to benefit the UAE economy through ADNOC's In-Country Value (ICV) programme. This initiative supports local economic growth and diversification by ensuring a significant portion of spending remains within the country.

The ESTIDAMA Project aims to extend ADNOC Gas' natural gas pipeline network from around 3,200 kilometres to over 3,500 kilometres. This expansion will enable higher volumes of natural gas to be transported to customers in the Northern Emirates of the UAE.

Ownership of ESTIDAMA is being transferred from ADNOC Gas to ADNOC. Despite this transfer, ADNOC Gas will continue managing ESTIDAMA, leveraging its expertise in construction and pipeline operations. ADNOC will cover the capital expenditures for this critical infrastructure project.

Dr. Ahmed Alebri, Chief Executive Officer of ADNOC Gas, stated, "This award supports the ongoing expansion of the UAE's gas pipeline network, which will bring lower-cost and sustainable natural gas to more locations across the country. We are proud to play a leading role in meeting the growing demand for gas across the country and enabling the UAE's goal of gas self-sufficiency."

Operational Efficiency and Shareholder Value

Following the ownership transfer, ADNOC Gas will continue benefiting from the pipeline network expansion while improving capital efficiency. This ensures maximum value for shareholders. Dr. Alebri added that with this transfer, ADNOC Gas can enhance its capital efficiency while continuing to benefit from expanding pipeline networks.

ADNOC Gas will also expand its domestic business through ESTIDAMA by paying ADNOC a variable transmission fee based on actual throughput of the pipeline. Additionally, ADNOC Gas will be compensated for operating and maintaining ESTIDAMA on behalf of ADNOC.

This strategic move aligns with ADNOC's broader goals of enhancing operational efficiency and supporting local economic growth through substantial investments in infrastructure projects like ESTIDAMA.

The project underscores ADNOC's commitment to ensuring energy security and sustainability while fostering economic development within the UAE.

With inputs from WAM