Gas takes centre stage in Adnoc downstream expansion
13 April 2023
This package on the UAE’s downstream sector also includes:
> Fertiglobe to pay $700m in second-half 2022 dividend
> Borouge signs East Africa distribution agreement
> Adnoc receives bids for key Estidama project packages
> Adnoc to study ammonia value chain in German state
> Adnoc Gas receives bids for ethane recovery project
> Adnoc committed to supplying hydrogen says executive
Regional energy producers are racing to increase their gas production and supply potential as natural gas as a clean energy source becomes more important in the global energy mix.
By merging its gas processing and liquefied natural gas (LNG) businesses this year, Abu Dhabi National Oil Company (Adnoc) has made considerable strides in this race.
Adnoc Gas, the new, combined entity that began operating on 1 January, has a processing capacity of about 10 billion cubic feet a day (cf/d) of gas across eight onshore and offshore sites and a pipeline network of over 3,250 kilometres.
This makes the company, now listed on the Abu Dhabi Securities Exchange, one of the largest gas processing firms in the world.
The strategic move to consolidate its gas processing business underscores Adnoc’s ambition to propel the growth of its overall downstream portfolio, including petrochemicals, with the help of gas.
Adnoc Gas is already overseeing progress on vital downstream projects inherited from the erstwhile Adnoc Group subsidiaries Adnoc Gas Processing and Adnoc LNG.
Sales gas pipeline network
The Estidama project, crucial to enhancing Adnoc’s sales gas pipeline network across the UAE, is progressing under Adnoc Gas’ management.
The project is part of Adnoc Group’s 2030 mandate to ensure a sustainable natural gas supply to its key customers in the country. It aims to cater to increasing demand for gas from industrial consumers across the UAE, particularly in the Northern Emirates.
Contractors recently submitted bids for two key engineering, procurement and construction (EPC) packages of the Estidama project – commercial bids for package two and technical bids for combined package numbers four and seven.
The scope of work on Estidama package two broadly involves building a new facility at the KP-30 location of the Habshan gas compressor plant (HGCP) in Abu Dhabi and installing three variable frequency drive motor-driven compressors.
The combined package involves laying a new pipeline from the Al-Shuwaib pig launcher and pig receiver station to the Sajaa gas facility in Sharjah. The scope also covers building a new gas pipeline between BVS-2/KP28.7 in Abu Dhabi to Dubai’s Margham gas facility to meet increased gas demand from Adnoc Gas Processing’s customer Dubai Supply Authority (Dusup).
The EPC work on the estimated $2bn Estidama project has been divided into seven packages.
Abu Dhabi-based contractor Integrated Specialised General Contracting Company (Iscco) won package one, understood to have a contract value of $18m, in December 2021.
In January this year, MEED named frontrunners to win packages three and six.
Package five is expected to be tendered separately to contractors as part of a planned second phase of the sales gas pipeline upgrade project.
As per the original project schedule, EPC works on the Estidama project are due to be completed in 2025.
Ramping up ethane output
Adnoc Gas is in charge of one of the world’s largest gas processing complexes in Abu Dhabi, with the capacity to process about 8 billion cf/d from its Asab, Bab, Bu Hasa, Habshan and Ruwais plants.
Increased volumes of ethane production will allow the company to commercialise it to supply feedstock to Borouge for its under-construction Borouge 4 petrochemicals complex, as well as to derivatives plants in the upcoming Taziz complex. Adnoc Gas intends to achieve this through the Maximise Ethane Recovery & Monetisation (Meram) project.
Adnoc Gas is understood to have issued the main tender for Meram in February, with the scope of work comprising the detailed engineering aspect of the project. Contractors submitted technical bids for the tender in early March.
Taziz chemicals complex
Meanwhile, investors in the Taziz petrochemicals derivatives-producing industrial complex in Ruwais are pushing ahead with their projects.
Taziz – a 60:40 joint venture (JV) of Adnoc and Abu Dhabi’s industrial holding company ADQ – is overseeing the development of the sprawling industrial complex, which will mainly draw ethylene feedstock from the Borouge 4 facility to produce several in-demand chemicals.
A JV of UAE-based Fertiglobe, South Korea’s GS Energy and Japanese investment firm Mitsui has officially awarded Italian contractor Tecnimont the main EPC contract for its planned blue ammonia project in the Taziz Industrial Chemicals Zone.
The JV has appointed KBR to provide the technology licence, basic engineering design, proprietary equipment and catalyst for the low-carbon ammonia plant, which will have a capacity of 1 million tonnes a year (t/y).
India’s Reliance Industries is also an investor in the Taziz complex, having forged a partnership with Taziz and Abu Dhabi-based Shaheen Chem Holdings Investment (Shaheen) to invest $2bn in developing three chemical plants producing chlor-alkali (940,000 t/y), ethylene dichloride (1.1 million t/y) and polyvinyl chloride (360,000 t/y).
Switzerland-based Proman, meanwhile, has committed to building the UAE’s first methanol plant at Taziz, with a planned production capacity of 1.8 million t/y.
As projects in the first phase of the chemicals complex move forward, Taziz is also understood to be gearing up for a second phase to more than double the number of chemicals produced at the derivatives hub.
This month’s special report on the UAE also includes:
> UPSTREAM: Strategic Adnoc projects register notable progress
> POWER: UAE power sector shapes up ahead of Cop28
> WATER: UAE begins massive reverse osmosis buildup
> BANKING: UAE lenders chart a route to growth
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Exclusive from Meed
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Dubai seeks consultants for drainage projects6 February 2026
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Modon tenders Ras El-Hekma construction contracts6 February 2026
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Egypt contractor secures €58m loan for Hungary power plant6 February 2026
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AD Ports signs Jordan Aqaba port PPP deal6 February 2026
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Chinese firm wins Ceer automotive supplier park deal6 February 2026
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