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Adnoc Gas to rally UAE downstream project spending

7 April 2026

 

Despite the impact of recent Iranian attacks on its assets, the gas processing business of Abu Dhabi National Oil Company (Adnoc Gas) is on course to emerge as the largest spending entity in the UAE’s downstream oil and gas sector this year.

Adnoc Group created Adnoc Gas, which began operating as a commercial entity in 2023, through the merger of its former subsidiaries Adnoc Gas Processing and Adnoc LNG. The consolidation of Adnoc’s gas processing and liquefied natural gas (LNG) operations formed one of the world’s largest gas processing entities, with a capacity of about 10 billion standard cubic feet a day (cf/d) across eight onshore and offshore sites, including Asab, Bab, Bu Hasa, Habshan and Ruwais.

The scale of its infrastructure – particularly its 3,250-kilometre pipeline network, which is being expanded under the $3bn Estidama project – positions Adnoc Gas as a critical enabler of both domestic industrial growth and export competitiveness.

Resilience amid geopolitical risk

The recent drone-related disruptions highlight the growing exposure of Gulf energy infrastructure to regional conflict. However, the limited operational impact reported by Adnoc Gas suggests a high degree of system redundancy and resilience, supported by networked infrastructure and diversified processing capacity.

This resilience is crucial as the company pushes ahead with its $20bn-$28bn capital programme for 2023-29. Continued investment despite security risks signals confidence in both project economics and the UAE’s ability to safeguard critical assets.

Rich Gas Development

At the core of Adnoc Gas’ expansion strategy is the Rich Gas Development (RGD) programme, which aims to increase processing capacity by 30% by 2030.

The RGD project will enable the development of new gas reservoirs, helping to boost gas liquids exports, support UAE gas self-sufficiency and provide feedstock to the country’s growing petrochemicals sector, Adnoc Gas says.

The first phase of the RGD project is under construction. Adnoc Gas awarded $5bn-worth of engineering, procurement and construction management (EPCm) contracts in three tranches for phase one last June – its largest-ever capital investment.

The contracts cover the expansion of key gas processing plants to increase throughput and improve operational efficiency across four facilities: Asab, Bu Hasa, Habshan (onshore) and the Das Island liquefaction facility (offshore).

The first tranche, valued at $2.8bn, was awarded to UK-headquartered Wood for the Habshan facility. The company said the contract value includes pass-through revenue and that it expects to recognise about $400m in EPCm revenue.

Wood’s scope includes upgrades and debottlenecking of the Habshan and Habshan 5 gas processing complexes and pipelines, including brownfield modifications and the installation of new facilities.

The remaining two tranches – $1.2bn for the Das Island liquefaction facility and $1.1bn for the Asab and Bu Hasa facilities – were awarded to UAE-based Petrofac and Dubai-based Kent, respectively.

Petrofac, separately, said it will provide EPCm services and oversee procurement and construction contracts for a new inlet facility; two gas dehydration and compression trains, each with a capacity of 420 million cf/d; and associated infrastructure at Das Island. The company will also upgrade existing facilities to increase capacity for collecting and transporting raw gas.

RGD growth phases

Adnoc Gas’ capital expenditure commitment of $20bn for the 2023-29 period is expected to rise to about $28bn as it targets final investment decisions (FIDs) on the second and third phases of the RGD programme in the first quarter of 2026.

These phases involve building a natural gas liquids (NGL) fractionation train at the Ruwais facility and a new gas processing train at Habshan. Adnoc Gas has selected main contractors for EPC works on both projects, although official contract awards are pending.

Italy’s Tecnimont has been selected for the Ruwais NGL Train 5 project, which will have a capacity of 22,000 tonnes a day, or about 8 million tonnes a year.

China-based Wison Engineering has been selected for the Habshan 7 gas processing train. The Habshan complex is one of the largest in the UAE and the wider Middle East and North Africa region, with a capacity of 6.1 billion cf/d across five trains and 14 processing units.

With Adnoc Group advancing its P5 programme to raise oil production capacity to 5 million barrels a day by 2027, higher volumes of associated gas are set to enter the grid. The new train at Habshan, scheduled for commissioning in 2029, will help process these additional volumes.

Bab Gas Cap development

As part of its upstream expansion plans, Adnoc Group is working to extract gas from four underdeveloped gas cap reservoirs at the Bab onshore field: Thammama A, B, F and H. The Thammama A, B and H reservoirs are expected to produce a combined 1.45 billion cf/d, while Thammama F is projected to produce 396 million cf/d.

Existing processing capacity at Habshan will be insufficient to handle these volumes. As a result, Adnoc Gas plans to build new facilities to process up to 1.85 billion cf/d of additional gas.

The company is planning a new gas processing plant in the Bab area, about 170 kilometres from Abu Dhabi, along with associated pipelines and supporting infrastructure, as part of the broader Bab gas cap development project.

Adnoc Gas has divided the EPC scope into four packages. It completed contractor prequalification in February and is expected to issue main EPC tenders in the second quarter.

The company’s capital expenditure commitment could exceed $30bn once it reaches FID on the Bab gas cap development, which is expected later this year.

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Indrajit Sen

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