AlwaysFree: Adnoc Consolidates Natural Gas, LNG Units As Part Of $150 Billion Growth Plan

According to Natural Gas Intelligence article published on November 30, 2022, the United Arab Emirates’ Abu Dhabi National Oil Co. (Adnoc), is planning to combine its natural gas processing and LNG units into one partially public company as a part of its plans to modernize its structure and boost production.

Dubbed Adnoc Gas, the new entity would incorporate all of the group’s gas processing operations and growing liquefied natural gas business into one firm by the beginning of next year. It would become one of the world’s largest gas processing firms, with around 10 Bcf/d of capacity and a more-than-2,000 mile pipeline network.

Adnoc disclosed it could also launch an initial public offering of a minority stake in the new firm on the Abu Dhabi Securities Exchange sometime next year.

Group CEO Sultan Ahmed Al Jaber said the UAE is positioning its hydrocarbon companies for a “new phase of accelerated growth across the energy value chain” as it moves to lower carbon emissions while increasing production and proven reserves.

“The world needs maximum energy, minimum emissions and it needs all the energy solutions if we are to ensure global energy security,” Al Jaber said.

Adnoc holds a 70% stake in its LNG unit, with the remainder held by Mitsui & Co. (15%), BP plc (10%) and TotalEnergies SE (5%). It also holds 68% of its gas processing business, joined by Shell plc (15%), TotalEnergies (15%) and Thailand’s Pptep (2%).

The move was announced in a series of decisions approved by Adnoc board of directors Monday. The board also approved directives for the group to pursue a net-zero emissions target by 2050 and to accelerate gas and oil production into 2027. Adnoc board approved a capital expenditure plan of $150 billion over the next five years.

Part of its future investment strategy also involves the creation of a vertical business that would focus on new energy technologies, LNG and international investments.

Adnoc has been expanding its LNG marketing focus since 2019, diversifying its exports destinations to almost entirely Japan to portfolio buyers like TotalEnergies and Vitol, along with other Asian clients. The firm is aiming to nearly triple its LNG output to around 15 million metric tons/year (mmty).

In April, it proposed a 9.5 mmty LNG project at the port of Fujairah on the Gulf of Oman as a strategic site to deliver LNG to Europe and Asia. Adnoc signed a multi-year agreement in September to deliver several LNG cargoes to German utility RWE AG as soon as next year.

In June, the Abu Dhabi Investment Authority completed a deal to buy 10% of Sempra Infrastructure for $1.73 billion. The LNG and North American energy infrastructure arm of San Diego’s Sempra operates the Cameron LNG export facility in Louisiana and is developing further export projects on the Gulf Coast and in Mexico.

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