ADNOC Gas plc announced Wednesday the award of a $3.6 billion (AED 13.1 billion) contract to a joint venture between National Petroleum Construction Company Co. PJSC (NPCC) and Tecnicas Reunidas S.A. to expand its gas processing infrastructure in the UAE.
In a statement posted on its site, ADNOC Gas noted that the strategic Maximizing Ethane Recovery and Monetization (MERAM) project aims to achieve dual objectives. The first of these is to increase ethane extraction, by a range of 35-40 percent, from ADNOC Gas’s existing onshore facilities in the Habshan complex through the construction of new gas processing facilities, and the second is to unlock further value from existing feedstock and deliver it to Ruwais via a dedicated 120-kilometer natural gas liquids pipeline, the company outlined in the statement.
Natural gas is an important transitional fuel with lower carbon emissions when burned compared to other fossil fuels, ADNOC Gas noted in the statement, adding that it also serves as an important raw material in industrial value chains.
The company said in the statement that it continues to leverage opportunities arising from ADNOC’s “integrated gas masterplan”, which it highlighted links every part of the gas value chain in the UAE, “ensuring a sustainable and economic supply of natural gas to meet local and international demand”.
The plan includes new approaches and technologies to enable increased gas recovery from existing fields and develop untapped resources, ADNOC Gas said in the statement.
“This capital project represents ADNOC Gas’ latest investment in its gas processing infrastructure and underscores our commitment to responsibly meeting our customers’ current and future energy demand for natural gas and its feedstock,” Ahmed Mohamed Alebri, the Chief Executive Officer of ADNOC Gas, said in a company statement.
“The expansion of our gas processing infrastructure will also provide additional energy to the country’s growing industrial section, while stimulating economic growth and diversification through the significant ICV generated by the contract,” he added.
Earlier this month, ADNOC Gas reported net income of $2.3 billion in the first half of the year in a separate statement posted on its site. In that statement, ADNOC Gas revealed that its H1 revenue stood at $10.6 billion, compared to pro forma adjusted revenue of $13.3 billion in H1 2022, “impacted by the pricing environment”. Revenue in the second quarter was reported at $5.4 billion compared to pro forma adjusted revenue of $7.1 billion in Q2 2022.
“ADNOC Gas adapted to lower LPG and Brent crude oil prices in H1 2023 compared to the high pricing environment of H1 2022,” the company noted in the results statement.
“The company strategically shifted towards higher-margin export liquids and focused on increased efficiency,” it added.
“These measures enabled the Company to maintain a flat EBITDA of $1.8 billion and net income of $1.0 billion in Q2 2023, demonstrating that ADNOC Gas is a predictable and resilient margin business underpinned by profitable growth,” it continued.
In the company’s results statement, Alebri said, “our results for the first half of 2023 showcase the resilience and robustness of our business in the current lower price environment compared to the higher prices witnessed in H1 2022”.
“We continue to witness long-term structural demand growth for natural gas as a critical fuel for the responsible global energy transition. ADNOC Gas remains fully committed to investing in our people, operations, and markets, and we have continued to invest in our strategic growth opportunities throughout the first half of 2023,” he added.
“Our recent signing of significant long-term LNG agreements and our domestic investments demonstrate that we remain ideally positioned to meet both local and international demand, while further decarbonizing our operations in line with the UAE’s net zero 2050 ambition, as we continue to deliver value for our shareholders over the longer-term,” Alebri continued.
Back in July, ADNOC Gas announced a 14 year supply agreement with Indian Oil Corporation Ltd (IOCL) for the export of up to 1.2 million metric tons per annum of LNG “to India’s largest integrated and diversified energy company”.
“The agreement, valued in the range of $7 billion to $9 billion (AED25.7 to AED33 billion) over its 14-year term, signifies a major step forward in the partnership between the two industry leaders,” ADNOC said in a company statement at the time.
In May, ADNOC Gas announced a three year supply agreement with TotalEnergies Gas and Power Limited, a subsidiary of TotalEnergies, for the export of LNG.
“[The] value of agreement is expected to be in range of $1 billion to $1.2 billion under current market conditions,” ADNOC Gas stated back in May.
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