meed-logo

line1 line2 line3
SIGN IN / REGISTER

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:
> Lummus seeks to expand Abu Dhabi office
> 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.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11214144/main.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Contractor wins $218m Aramco-backed logistics hub deal

    7 May 2026

     

    Saudi Amana, the local affiliate of UAE-based construction firm Group Amana, has won an estimated SR820m ($218m) contract to build a logistics complex at King Salman Energy Park (Spark) in Saudi Arabia's Eastern Province.

    Asmo, the logistics joint venture of Saudi Aramco and DHL Supply Chain, awarded the contract.

    Asmo received the main contract bids on 18 March, as MEED reported.

    Al-Khobar-based engineering firm House of Consulting Office is the project consultant.

    In February, Asmo signed an agreement with Bahrain‑headquartered Arcapita Group Holdings to deliver the project at Spark.

    The project will feature a 43,000-square-metre (sq m), temperature-controlled Grade A warehouse; more than 3,000 sq m of offices and staff amenities; 5,300 sq m dedicated to chemicals storage; and an open yard covering about 1.2 million sq m.

    Planned for large-scale industrial use, the site is expected to incorporate advanced warehouse and building management systems, end-to-end digital connectivity, automation and robotics.

    It will also be developed in line with internationally recognised sustainability standards, featuring solar photovoltaic readiness, electric-vehicle charging infrastructure and a target of Leed Gold certification.

    The development aims to support the next stage of Saudi Arabia’s logistics and supply chain expansion.

    Under the deal structure, Arcapita will provide funding and retain ownership of the asset, while Asmo will develop the facility and then lease and operate it under a 22-year occupational lease.

    According to a statement, “the scheme will be executed via a forward-funding model, underscoring a long-term commitment to national infrastructure”.

    Asmo added that this will be its first purpose-built logistics centre and one of four strategic locations planned to anchor its nationwide logistics network, aligned with the National Transport and Logistics Strategy under Saudi Vision 2030.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16715420/main.jpg
    Yasir Iqbal
  • Kuwait postpones bid deadlines for four downstream oil tenders

    7 May 2026

     

    Kuwait has extended bid deadlines for four tendered contracts that are all focused on the country’s Mina Al-Ahmadi (MAA) refinery.

    The contracts include a project that has been tendered by state-owned downstream operator Kuwait National Petroleum Company (KNPC) to upgrade water transmission and storage infrastructure at the refinery.

    The contract will use the engineering, procurement and construction model and the tender was originally issued in October 2025 with an initial bid deadline of 4 January 2026.

    The tender has already seen several extensions and the latest rescheduling has set the bid deadline back from 19 April 2026 until 10 May 2026.

    The project is expected to take two years to complete and its scope is focused on expanding water storage capacity at the facility, either through extending existing tanks or building new tanks.

    The winning bidder will also be responsible for developing associated infrastructure and upgrading related systems that transport desalinated water to the refinery, such as pipelines and other infrastructure.

    In its 2024-25 annual report, KNPC said the project will help to meet demand for water at the facility’s refining and gas production units.

    The other three contracts are all maintenance contracts, which were also tendered by KNPC and have had their bid deadlines extended until 30 June 2026.

    The first of these is focused on mechanical maintenance of the Clean Fuel Project (CFP) units at the facility, as well as gas liquid production facilities.

    The CFP units were added to the refinery as part of the $16bn CFP, and were brought online in 2021.

    The project aimed to increase Kuwait’s capacity to produce low-sulfur fuels and, as part of the project, the MAA refinery was integrated with Kuwait’s Mina Abdulla (MAB) refinery.

    The project increased the capacity of MAB to 454,000 barrels a day (b/d) and the MAA refinery to 346,000 b/d.

    The second maintenance contract is focused on the mechanical maintenance of refining and production units at the MAA facility. The third contract is focused on workshop maintenance at the facility.

    The MAA refinery has been hit in several attacks during the US and Israel's war with Iran, which started on 28 February 2026.

    The full extent of the damage to the facility is currently unclear.

    Last month, MEED revealed that state-owned oil companies in Kuwait have fast-tracked the award of contracts to repair damage to infrastructure in the oil and gas sector.

    To expedite the award of contracts, deals were directly negotiated with trusted contractors without public tenders.

    The contracts were negotiated by senior officials at Kuwait Petroleum Corporation subsidiaries including Kuwait Oil Company and KNPC, sources said.

    It is not known whether any of these contracts related to repairs at the MAA refinery.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16715383/main.jpg
    Wil Crisp
  • Oman signs exploration agreement for methane hydrates

    7 May 2026

    Oman’s Ministry of Energy & Minerals (MEMR) has signed an agreement with Victarens Global Energy for the exploration of methane hydrates in Block 83 in the sultanate.

    Under the agreement, Victarens Global Energy will perform a study of Block 83, which spans approximately 11,000 square kilometers onshore Oman, over an initial period of two years, extendable for an additional two years based on the outcomes of the studies.

    “This step marks the first initiative of its kind in the sultanate to assess the potential of gas production through non-conventional methods, contributing to the diversification and sustainability of energy sources,” the MEMR said in a statement.

    The agreement was signed in Muscat by Salim Bin Nasser Al-Aufi, Oman’s Energy & Minerals Minister, and Kenan Issa, CEO of Victarens Global Energy.

    The project will be implemented in two main phases. The initial investment for the first phase is estimated at approximately $20m, while the second phase is expected to require around $200m, “reflecting the strategic importance of this project in exploring non-conventional energy resources”, the MEMR said in a statement.

    ALSO READ: Oman awards manganese exploration concession deal

    The scope of work on the first phase includes geological studies, analysis and reprocessing of existing geophysical data, and carrying out new seismic surveys to determine the volume and thickness of methane hydrate layers within the study area.

    Based on the results of this phase, the project will proceed to the second phase, which involves installing extraction equipment and testing the feasibility of commercial production.

    Should the project demonstrate economic viability for methane hydrate production, negotiations will be conducted between the MEMR and the company to establish a long-term agreement, including the commercial terms and profit-sharing mechanisms that ensure mutual benefits for both parties.

    “This agreement aims to explore and assess methane hydrate resources, supporting the adoption of advanced technologies in the energy sector and reinforcing the transition toward future energy sources, while promoting innovation and sustainability in the utilisation of natural resources. The agreement aligns with the objectives of Oman Vision 2040, which focuses on economic diversification, the development of the energy sector and strengthening the sultanate’s position as a regional hub for energy and advanced technologies,” the MEMR statement added.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16703851/main1050.jpg
    Indrajit Sen
  • Dubai advances Auto Market construction

    6 May 2026

     

    The construction works on the Dubai Auto Market, which is set to become one of the world’s largest and most advanced automotive trading hubs, are progressing.

    Enabling works are under way, being carried out by local contractor Rad International Road Construction.

    US-based engineering firm Aecom is serving as the project consultant.

    In November last year, Dubai Municipality signed a partnership agreement with DP World’s Economic Zones division to establish and manage the market, as MEED reported. Under the agreement, DP World will provide integrated logistics and zone management services, including e-commerce and trade finance solutions.

    The Dubai Auto Market will span a 22 million-square-foot complex, to be developed by DP World. It is planned to include more than 1,500 showrooms, clustered workshop zones, warehouses and multi-storey parking facilities, alongside a convention centre, hotel, auction house, retail outlets, and food and beverage areas.

    The facility is designed to handle more than 800,000 vehicles a year, including new and used electric, hybrid and conventional models.

    The UAE’s construction industry is projected to expand by 5% in real terms in 2026, supported by rising foreign direct investment (FDI), growth in the construction sector and increased oil sector activity.

    According to the UAE’s Federal Competitiveness and Statistics Centre, construction value added rose by 8.8% year on year (YoY) in Q2 2025, following YoY growth of 7% in Q1 2025 and 10.8% in Q4 2024.

    The commercial construction sector is forecast to grow by 6.4% in 2026 and to record average annual growth of 4.9% from 2027 to 2030, supported by investment in tourism and hotel facilities.

    The industrial construction sector is expected to expand by 4.1% in real terms in 2026, then to average 4.4% annually from 2027 to 2030, supported by improved investment in manufacturing facilities.

    The infrastructure construction sector is projected to grow by 5.8% in real terms in 2026, before averaging 4.3% annual growth from 2027 to 2030, supported by the government’s focus on improving regional connectivity through road and rail development.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16700367/main.png
    Yasir Iqbal
  • Saudi Arabia extends bid deadline for solar projects

    6 May 2026

     

    Saudi Arabia’s principal buyer, Saudi Power Procurement Company (SPPC), has extended the deadline for developers bidding for four solar projects under the seventh round of the National Renewable Energy Programme (NREP).

    Round seven of the NREP comprises solar photovoltaic (PV) and wind independent power producer (IPP) projects with a combined capacity of 5,300MW. The renewables programme is being led and supervised by the Ministry of Energy.

    The four solar PV projects comprise:

    • 1,400MW Tabjal 2 solar PV IPP (Tabrijal, Al-Jouf province)
    • 600MW Mawqqaq solar PV IPP (Mawqqaq, Hail province)
    • 600MW Tathleeth solar PV IPP (Tathleeth, Aseer province)
    • 500MW South Al-Ula solar PV IPP (Al-Ula, Medina province)

    The projects were tendered in January, with an initial bid submission deadline of 30 April.

    The new deadline is 30 June.

    The solar projects are the latest in a string of large-scale power and water developments across the region to have bidding extended in recent weeks.

    In the UAE, the bid deadline for the seventh phase of Dubai Electricity & Water Authority’s Mohammed Bin Rashid Al-Maktoum Solar Park was recently pushed back to 1 July. 

    Bids for the 1,300MW Bilgah and 900MW Shagra wind IPPs are currently still due by 14 May, according to a source.

    In January, MEED reported that 16 developers qualified to bid as both managing and technical members for the four solar PV projects under the seventh round of the NREP.

    These include:

    • Abu Dhabi Future Energy Company (Masdar) 
    • Alfanar Company (Saudi Arabia)
    • Al-Gihaz Holding Company (Saudi Arabia)
    • EDF Power Solutions (France)
    • Kahrabel (Engie) (UAE / France)
    • Sembcorp Utilities (Singapore)
    • Jinko Power (HK) (China)
    • TotalEnergies Renewables (France)
    • Al-Jomaih Energy & Water (Saudi Arabia)
    • Korea Electric Power Corporation (Kepco) (South Korea)
    • Nesma Renewable Energy (Saudi Arabia)
    • Korea Western Power (South Korea)
    • Marubeni Corporation (Japan)
    • SPIC Shanghai Electric Power (China)
    • WahajPeak Holdings (Saudi Arabia)
    • FAS Energy for Trading Company (Saudi Arabia)

    A further six companies qualified to bid as a managing member only for the solar PV projects. These include:

    • Saudi Electricity Company (Saudi Arabia)
    • Grupo Empresarial Enhol (Spain)
    • Power Construction Corporation of China (Power China) (China)
    • GD Power Development (China)
    • Gulf Development Public Company (Thailand)
    • Reliance NU Energies Private (India)

    The renewable energy programme aims to supply 50% of the kingdom’s electricity from renewable energy by 2030.

    Earlier rounds under the NREP have already put in place large capacities. Last October, SPPC awarded contracts to develop and operate five renewable energy projects under round six of the NREP.

    These comprise four solar PV IPP projects and one wind IPP project with a total combined capacity of 4,500MW.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16700361/main.jpg
    Mark Dowdall