ADNOC Gas Awards EPC Contracts Worth $550 Million
The Abu Dhabi Securities Exchange (ADX)-listed ADNOC Gas on Monday said that it has awarded the engineering, procurement & construction (EPC) contracts valued $550 million for the next phase of the UAE sales gas pipeline network enhancement ESTIDAMA Project.
Furthermore, the ownership of ESTIDAMA is being transferred from ADNOC Gas to ADNOC, thereby significantly optimising ADNOC Gas’ capital efficiency, the company informed ADX in the morning.
The EPC contracts were awarded to NMDC Energy and Galfar Engineering & Contracting W.L.L Emirates. Approximately 70% of the contracts’ value is expected to flow back into the UAE economy through ADNOC’s In-Country Value (ICV) program, supporting local economic growth and diversification.
ESTIDAMA will extend the UAE’s natural gas pipeline network operated by ADNOC Gas from approximately 3,200 km to over 3,500 km, 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 the construction and pipeline operations, with ADNOC covering the capital expenditures for this critical infrastructure project.
ADNOC Gas CEO Dr Ahmed Alebri said that 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. With the transfer of ownership of the ESTIDAMA Project to ADNOC, ADNOC Gas will continue to benefit from the expansion of the pipeline networks, while improving our capital efficiency to ensure that we maximize value for our shareholders,” Dr Alebri added.
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 be paid to operate and maintain ESTIDAMA on behalf of ADNOC.
Key Packages
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, which is committed to manage and deliver ESTIDAMA while progressing with its other significant growth projects, 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.
