Adnoc spurs downstream gas expansions
13 October 2023
This package on the UAE’s downstream sector also includes:
> Adnoc Gas picks site for planned LNG terminal
> Adnoc Gas receives prices for Estidama package
> Adnoc and Dusup sign key gas supply agreement
> Adnoc receives bids for gas pipeline packages
> Adnoc receives prices for sales gas pipeline packages
> Adnoc Gas awards $3.6bn Project Meram contract
Demand for natural gas has risen exponentially in this decade, with its share in the global energy mix set to grow further in the decades to come.
Regional energy producers are deploying major capital expenditure programmes to increase their gas production and processing capabilities to cater to growing demand.
The UAE is striving to achieve self-sufficiency in gas production by 2030. With this objective in mind, Abu Dhabi National Oil Company (Adnoc) has committed significant investment towards expanding its midstream and downstream gas capabilities.
These projects seek to increase the availability of gas for utility providers and industrial customers in the UAE and ramp up ethane output to grow the country’s petrochemical sector and its derivatives ecosystem.
Hail and Ghasha galvanises UAE upstream market
Ruwais LNG project
Adnoc Gas, the gas processing business of Adnoc, has finalised the location for its planned liquefied natural gas (LNG) export terminal. The facility will have the capacity to produce about 9.6 million tonnes a year (t/y) of LNG from two processing trains, each with a capacity of 4.8 million t/y.
The overall value of the planned project is estimated to be upwards of $4.5bn, based on capital expenditure by operators on similar schemes worldwide.
Adnoc Gas received technical bids from contractors in May for the engineering, procurement and construction (EPC) works on the project, which will be built in Ruwais Industrial City in Abu Dhabi’s Al-Dhafrah region.
Adnoc Gas had originally planned to build the LNG terminal in the UAE emirate of Fujairah, which sits outside the Strait of Hormuz on the coast of the Gulf of Oman. In early May, however, the company announced it was shifting the location of the project from Fujairah to Ruwais, Abu Dhabi.
Sales gas pipeline network
Adnoc Gas is progressing the Estidama project, which is crucial to enhancing Adnoc’s sales gas pipeline network across the UAE. The project aims to cater to rising demand for gas from industrial consumers across the UAE, particularly in the Northern Emirates.
Contractors submitted commercial bids in August for combined package numbers 4 and 7. 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’ customer Dubai Supply Authority (Dusup).
EPC works on the estimated $2bn-plus Estidama project have been divided into seven packages. Abu Dhabi-based contractor Integrated Specialised General Contracting Company (Iscco) won package 1, understood to have a contract value of $18m, in December 2021.
In early July, Adnoc Gas awarded contracts worth a combined $1.34bn for two other packages of the Estidama project. UK-headquartered Petrofac was awarded the EPC contract for package 2 of the Estidama project, estimated to be worth $720m.
A consortium of Abu Dhabi’s National Petroleum Construction Company (NPCC) and Lebanon-headquartered CAT Group won Estidama package 3, which is valued at about $630m.
Contractors submitted technical bids for package 6 in August 2022 and commercial bids by 21 November. Work on package 6 entails the installation of a 52-inch, 74-kilometre pipeline from Sweihan to Al-Shuwaib in Abu Dhabi and building two block valve stations.
Package 5 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 cubic feet a day 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 awarded a $3.6bn contract for Project Meram to a consortium of NPCC and Spanish contractor Tecnicas Reunidas in early August, with EPC work on the project starting later that month. The scope of work on the contract includes commissioning new gas processing facilities to enable an optimised supply to the Ruwais industrial complex, Adnoc Group said.
The strategic Meram project aims to achieve dual objectives, Adnoc stated.
The first goal is to increase ethane extraction by 35 to 40 per cent from Adnoc Gas’ existing onshore facilities in the Habshan gas processing complex by constructing new gas processing facilities.
The second goal is to unlock further value from existing feedstock and deliver it to Ruwais via a 120km natural gas liquids (NGL) pipeline.
LATEST NEWS FROM THE UAE's CHEMICALS SECTOR:
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> Firms express interest for Abu Dhabi methanol project
> Borouge and Borealis launch recycled products range
> Fertiglobe makes $84m profit in second quarter
> Borouge announces $231m profit in second quarter
> Adnoc opens formal chemicals integration talks with OMV
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 awarded Italian contractor Tecnimont the main EPC contract for its planned blue ammonia project in the Taziz Industrial Chemicals Zone in February.
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 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 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 has committed to building the UAE’s first methanol plant at Taziz, with a planned production capacity of 1.8 million t/y. The Proman-Taziz JV completed the contractor prequalification process for the EPC tendering round for the methanol production project in August. The operator is expected to issue the main EPC tender later this year.
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.
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Lowest bidders emerge for Oman Sinaw-Duqm road
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Aramco turns attention to strategic projects
12 September 2025
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Date & Time: Wednesday 24 September 2025 | 11:00 AM GST
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3. Analysis of the key trends, opportunities and challenges facing the sector
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A well-known and respected thought leader in Mena affairs, Edward James has been with MEED for more than 19 years, working as a researcher, consultant and content director. Today he heads up all content and research produced by the MEED group. His specific areas of expertise are construction, hydrocarbons, power and water, and the petrochemicals market. He is considered one of the world’s foremost experts on the Mena projects market. He is a regular guest commentator on Middle East issues for news channels such as the BBC, CNN and ABC News and is a regular speaker at events in the region.
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Alec set to launch IPO on Dubai Financial Market
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UAE-based Alec Holdings has announced that it will list 20% of its share capital on the Dubai Financial Market through an initial public offering (IPO).
According to an official statement, the firm will offer 1 billion shares, representing 20% of its share capital. The subscription will be offered in three tranches and will open on 23 September and close on 30 September.
The first tranche comprises individual subscribers, the second includes professional investors, and the third tranche is reserved for eligible employees of Alec and the Investment Corporation of Dubai (ICD).
ICD, the investment arm of the Government of Dubai, is currently the sole shareholder of Alec. It will retain 80% of Alec’s issued share capital following the offering.
Emirates NBD Capital and JP Morgan Securities have been appointed as joint global coordinators. Both firms, along with Abu Dhabi Commercial Bank and EFG Hermes, have been appointed as joint bookrunners.
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Emirates NBD has been appointed as the lead receiving bank.
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“Alec intends to distribute a cash dividend of AED200m, payable in April 2026, and a cash dividend of AED500m for the financial year ending 31 December 2026, payable in October 2026 and April 2027,” the statement added.
“The company further intends to distribute cash dividends in April and October of each year, with a minimum payout ratio of 50% of the net profit generated for the relevant financial period, subject to the approval of the board of directors and the availability of distributable reserves,” Alec said.
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Kuwait’s Public Authority for Housing Welfare (PAHW) has invited local and international firms to submit their statements of qualifications (SoQs) by 30 October for a tender covering the development of three residential cities under a public-private partnership (PPP) framework.
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Interested companies can collect the request for qualification (RFQ) documents between 18 September and 1 October.
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Kuwait construction market overview
Kuwait’s construction and infrastructure projects market continued its recovery in the first half of 2025, with over $1.8bn-worth of contracts awarded by 8 August.
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Lowest bidders emerge for Oman Sinaw-Duqm road
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Oman’s Ministry of Transport, Communications and Information Technology has opened bids for two contracts covering the upgrade of sections three and four of the Sinaw-Mahout-Duqm road.
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Aramco turns attention to strategic projects
12 September 2025
In the second quarter of 2025, Saudi Aramco’s capital expenditure (capex) stood at $12.3bn, marking a marginal year-on-year increase of 1.46%. For the first half of the year, the company recorded capex of $24.85bn, up 9.5% compared to the same period last year.
The company had earlier issued capital investment guidance of $52bn to $58bn for 2025, excluding approximately $4bn in project financing.
Concerns grew in Saudi Arabia’s offshore oil and gas projects market earlier this year as engineering, procurement, construction and installation (EPCI) contract awards stalled.
Aramco spent a record $5bn on offshore EPCI contracts in 2024 and was expected to surpass that in 2025. However, it awarded no Contract Release Purchase Orders (CRPOs) in the first half of the year, fuelling apprehension among contractors and suppliers.
In July, Aramco dispelled speculation by awarding five tenders worth over $3bn. The CRPOs are numbers 150, 157, 158, 159 and 160, and involve EPCI work and infrastructure upgrades at the Abu Safah, Berri, Manifa, Marjan and Zuluf offshore oil fields.
Aramco also awarded four additional CRPOs as part of a large-scale infrastructure expansion at the Zuluf offshore field. These are CRPOs 145, 146, 147 and 148, with a combined estimated value of nearly $6bn.
With these contract awards, Aramco has nearly doubled its offshore capex this year compared to 2024, marking another year of robust upstream investment.
Looking ahead, Aramco is evaluating bids received for seven key tenders in July and August.
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Onshore projects advance
In parallel with the Safaniya offshore expansion, Aramco is tendering a separate project to build onshore surface and processing facilities to handle additional volumes of oil and associated gas generated by the expanded offshore infrastructure.
The scope of the Safaniya onshore facilities project has been divided into two main EPC packages: the first covering water treatment and injection units, and the second focused on produced water utilities. Contractors have been given deadlines of 24 October and 7 November to submit technical and commercial bids.
Aramco is also understood to be close to awarding the main EPC contracts for the expansion of the Haradh gas-oil separation plant 3 (Gosp 3) in Saudi Arabia. Located within the Haradh hydrocarbons development in the Eastern Province, the project will increase output of the Arab Light crude grade from 300,000 barrels a day (b/d) to 420,000 b/d. It will also raise sour gas production to 32 million cubic feet a day (cf/d).
Ramping up gas production
In line with its goal of increasing gas production, Aramco is progressing its Jafurah unconventional gas programme. Situated in Saudi Arabia’s Eastern Province, the Jafurah Basin contains the largest liquid-rich shale gas play in the Middle East, with an estimated 200 trillion cubic feet of gas in place. The shale play spans approximately 17,000 square kilometres.
The Jafurah programme is a cornerstone of Aramco’s long-term gas strategy, with total lifecycle investment expected to exceed $100bn. In February 2020, Aramco received a capex allocation of $110bn from the Saudi government to support the long-term phased development of the unconventional gas resource base.
Aramco is estimated to have spent $25bn across the first three phases of Jafurah’s development. In November 2021, the company awarded $10bn in subsurface and EPC contracts for phase one of the programme.
On 30 June 2024, Aramco awarded 16 contracts worth approximately $12.4bn for phase two. The scope includes the construction of gas compression facilities, associated pipelines and the expansion of the Jafurah gas plant – covering gas processing trains, utilities, sulphur handling and export infrastructure.
In July 2024, a consortium of Spain’s Tecnicas Reunidas and China’s Sinopec was awarded a $2.24bn EPC contract by Aramco for phase three of the expansion.
Phase four of the Jafurah expansion is estimated at $2.5bn. The scope includes EPC works for three gas compression plants, each with a capacity of 200 million cf/d. Bids were submitted in mid-January, remain valid through September, and are under evaluation, with a contract award expected in Q4 2025.
Aramco is also tendering a major project to boost gas compression capacity at the Shedgum and Uthmaniya plants in the Eastern Province.
The facilities currently receive approximately 870 million cf/d and 1.2 billion cf/d of Khuff raw gas, respectively. The project aims to increase compression and processing capacity and to construct new pipelines to enhance gas transport.
Contractors are preparing bids for several EPC packages under the Shedgum and Uthmaniya gas compression project.
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> TRANSPORT: Infrastructure takes centre stage in Saudi strategyhttps://image.digitalinsightresearch.in/uploads/NewsArticle/14656451/main.png