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Adnoc funnels billions into boosting gas processing

15 October 2026

 

Abu Dhabi National Oil Company (Adnoc Group) is accelerating investment in gas processing and associated downstream infrastructure as demand in the UAE rises and the government prioritises lower-carbon energy growth.

Rising gas consumption in the UAE is being driven by rapid population growth, greater household electrification, expanding industrial bases and demand from gas-intensive downstream segments such as petrochemicals, fertilisers and metals.

Power generation and water desalination are also key sources of demand, while new industrial zones – as well as data centres supporting the expansion of artificial intelligence (AI) use in the country – add further baseload requirements.

Adnoc Gas, Adnoc Group’s gas processing subsidiary, is leading the UAE’s push to expand gas processing capacity and is executing a major capital expenditure (capex) programme worth $28bn over 2026-30.

As part of that capex plan, Adnoc Gas achieved a final investment decision (FID) on the second and third phases of its Rich Gas Development (RGD) programme earlier this year.

Adnoc Gas awarded $8.2bn of engineering, procurement and construction (EPC) contracts for the second and third phases of the RGD programme. These cover a new gas processing train at the Habshan complex and a natural gas liquids fractionation train at the Ruwais gas processing facility, respectively.

Under the awards, China-based Wison Engineering will execute phase 2 under a $3.9bn contract, while Italy’s Tecnimont has secured the $4.3bn phase 3 contract.

Adnoc Gas has also reiterated its $5bn capex for the first phase of the RGD scheme, which is under construction. The company awarded $5bn of engineering, procurement and construction management contracts in three tranches for phase 1 of the RGD programme in June last year, marking the company’s largest-ever capital investment.

Across all three phases, Adnoc Gas has committed a total of $13.2bn to the RGD programme.

Bab Gas Cap development

Looking ahead, Adnoc Gas is advancing towards FID on the estimated $8bn Bab gas cap development. The project will process up to 1.85 billion cubic feet a day (cf/d) of raw feed gas once Adnoc Group begins extracting reserves from four underdeveloped onshore reservoirs at the Bab field: Thammama A, B and H (projected to yield a combined 1.45 billion cf/d) and Thammama F (projected at 396 million cf/d).

Because existing trains at the Habshan complex cannot accommodate these supplementary volumes, the project entails building a processing plant approximately 170 kilometres from Abu Dhabi city, alongside pipeline networks and ancillary units.

Adnoc Gas has split the EPC scope into four packages, with technical bids due on 16 November:

  • Package 1: Main Bab gas cap processing plant
  • Package 2: Early civil works
  • Package 3: Pipeline network
  • Package 4: Non-process facilities and associated infrastructure

Four contractor consortiums prequalified to bid for the main contracts:

  • Larsen & Toubro Energy Hydrocarbon (India) / Samsung E&A (South Korea)
  • Saipem (Italy) / NMDC Energy (UAE)
  • Technip Energies (France) / JGC Corporation (Japan) / Sinopec (China)
  • Tecnimont (Italy) / China Petroleum Engineering & Construction Corporation 

Gas pipeline investments

Adnoc Group continues to invest in projects to enhance its gas transmission networks across the UAE, following its $3.5bn-plus capex on the Estidama programme earlier this decade to expand its sales-gas network in the country.

Adnoc Gas recently awarded the main contract for a project to build a new pipeline that will supply gas from the Habshan scraper launcher station at its Habshan gas compression complex in Abu Dhabi to the Al-Nouf customer receiving station, for delivery to Emirates Water & Electricity Company (Ewec).

The proposed 56-inch, 127km pipeline will help the UAE’s state utility, Ewec, meet additional gas demand to power the second phase of an AI data centre in Abu Dhabi, as well as support the relocation of some of its key assets in the Mirfa area of the emirate.

Adnoc Gas awarded the EPC contract for the project to India-based Kalpataru Projects International.

Separately, Adnoc is moving ahead with plans to build an oil pipeline network that will transport crude from its main offshore oil processing islands in the Gulf to its onshore crude export terminal at Jebel Dhanna, Abu Dhabi.

The planned network will source crude from Zirku Island and Das Island, where Adnoc gathers and treats oil produced at Abu Dhabi’s offshore fields, among other processing hubs, and transport it about 300km inland to the Jebel Dhanna terminal.

The proposed pipelines will eventually connect to the West-East crude pipeline network currently being built from Jebel Dhanna to the emirate of Fujairah, which is expected to be commissioned in 2027.

Boosting chemicals output

Meanwhile, following major investments over the past three years to set up specialty chemical plants under the first phase of its chemical derivatives complex in Ruwais Industrial City, Taziz is firming up plans for the second phase of the complex.

Taziz has partnered with local conglomerate Alpha Dhabi to undertake a joint feasibility and market study and, subject to FIDs and regulatory approvals, the second phase of the Taziz Industrial Chemicals Zone could produce up to 14 new chemicals, with total output capacity of about 2.2 million tonnes a year (t/y).

The chemicals under study include styrene and polystyrene, acrylic acid and derivatives, polyols, methylene diphenyl diisocyanate (MDI), epoxy resins and linear alpha-olefins. These are widely used across construction, automotive, packaging, consumer goods, infrastructure and advanced manufacturing.

Taziz, Germany-based chemicals producer Covestro and XRG – all wholly or majority-owned subsidiaries of Adnoc Group –  have launched a joint feasibility study to assess the development of a world-scale MDI plant in Ruwais Industrial City.

The partners aim to establish a facility in the Taziz Industrial Chemicals Zone with a production capacity of 660,000 t/y of MDI. The study will evaluate the technical, commercial and economic feasibility of the proposed plant, with the aim of informing a future investment decision.

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Indrajit Sen

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