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
  • Local contractor to build nine Bahrain substations

    30 July 2026

     

    Bahrain’s Electricity & Water Authority (EWA) has awarded the local Al-Kooheji Electrical a contract to build nine 66kV substations across the kingdom, according to a source.

    The project is estimated to be worth $110m and is intended to support rising electricity demand from Bahrain’s domestic, commercial and industrial sectors.

    Four local contractors submitted commercial bids for the contract in January. The bidders were:

    • Nass Contracting ($28.4m)
    • Poullaides Construction Company ($31.7m)
    • Mohammed Jalal Contracting ($32.4m)
    • Al-Kooheji Electrical ($34m)

    The substations will be located at South Hidd Industrial, Mondelez, Alba Downstream Park, Muharraq North, Hamala West, Bani Jamra, Hoora, Maqabah East and West Riffa Club.

    The scope includes the construction of the nine substations and control rooms, as well as the installation of transformers, switchgear and feeders connecting the facilities to the grid.

    It also covers communication cabling, monitoring systems, safety and security systems, and associated civil and structural works.

    As MEED understands, the substations are scheduled to be commissioned in stages. Two are planned for 2026, followed by four in 2027 and the remaining three in 2028.

    Serbia’s Energoprojekt Entel was appointed as consultant for the project in April 2025. The consultant’s contract was valued at about $460,000.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17834380/main.jpg
    Mark Dowdall
  • CB&I’s newly acquired unit wins Abu Dhabi wells contract

    30 July 2026

    US-based Chicago Bridge & Iron (CB&I) has announced that its Asset Solutions business – acquired earlier this year from UK-headquartered contractor Petrofac – has won a hydrocarbon well services contract in Abu Dhabi.

    The contract was awarded by Cosmo E&P Albahriya, a wholly owned UAE-based subsidiary of Japan’s Cosmo Energy Holdings Company (Cosmo).

    Under the well engineering services contract, CB&I Asset Solutions will support drilling, engineering, planning and operational activities for offshore Block 4 in Abu Dhabi.

    Cosmo secured 100% exploration rights for offshore Block 4 – covering 4,865 square kilometres of Gulf waters northwest of Abu Dhabi city – in February 2021.

    The block was offered in Abu Dhabi’s second hydrocarbons block competitive bidding round, launched by Abu Dhabi National Oil Company (Adnoc) in May 2019.

    “The award strengthens Asset Solutions’ position in the Middle East and solidifies new relationships with key regional operators. With shared goals of prioritising safe, stable and environmentally conscious production, CB&I’s UAE-based team will draw on its local and global experience of delivering innovative well engineering solutions,” the Texas-based CB&I said in a statement.

    ALSO READ: Abu Dhabi awards production licences for hydrocarbon blocks

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

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17834142/main4710.jpg
    Indrajit Sen
  • Oman tenders advisory for 3GW solar programme

    30 July 2026

    Nama Power & Water Procurement Company (Nama PWP) has invited bids for financial and commercial consultancy services for the development of three 1GW solar independent power projects (IPPs).

    The projects will connect to Oman’s main interconnected system (MIS) and are targeted to reach commercial operation by the second quarter of 2030.

    The successful bidder will provide financial and commercial consultancy services for the development of the projects and advise Nama PWP on the competitive tendering process.

    The tender was issued on 28 July, and the bid submissions deadline is 10 September.

    The three projects covered by the financial and commercial consultancy tender are understood to also be part of the 4GW programme, for which a technical advisory tender was issued on 15 July.

    As MEED reported, this covers four 1GW solar projects connected to the MIS, also targeting commercial operation by the second quarter of 2030.

    The deadline for bids is 26 August.

    Oman Electricity Transmission Company (OETC) had earlier outlined the planned grid connection for four 1GW solar IPPs as part of the sultanate’s renewable energy expansion through 2030.

    The projects are included in OETC’s Five-Year Annual Transmission Capability Statement for 2026-30.

    The first, the 1GW Adam solar IPP, is scheduled for grid integration in 2028 and is further ahead in the procurement process, with Nama PWP issuing a request for qualification for the project in June.

    OETC said it expects the 1GW Al-Kamil 2 solar project to be integrated in 2030 through the planned Sadaf 400kV grid station. The 1GW Dhofar solar IPP and 1GW Mahadha solar IPP are also scheduled for integration in 2030.

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

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17817321/main.jpg
    Mark Dowdall
  • Azerbaijan seeks interest for wastewater PPP

    29 July 2026

    Azerbaijan has invited developers to submit expressions of interest (EoIs) for a public-private partnership (PPP) project to rehabilitate the Hovsan wastewater treatment plant (WWTP) and develop new wastewater recycling facilities.

    The scheme will be Azerbaijan’s first wastewater PPP. The Asian Development Bank (ADB) is advising the government on the project.

    The Hovsan WWTP is Azerbaijan’s largest wastewater treatment plant with a design capacity of 640,000 cubic metres a day (cm/d).

    The project comprises two components. The first covers the rehabilitation, financing, operation and maintenance of the existing Hovsan plant to improve discharge quality and sludge management.

    The second component covers the design, construction, financing, operation and maintenance of a new wastewater recycling facility with a capacity of 100,000 cm/d. The facility will supply recycled water for irrigation.

    The overall project is expected to serve up to 2.5 million people in Baku.

    ADB’s Office of Markets Development and PPP (OMDP) is acting as transaction adviser. Its role includes supporting project concept development and structuring, preparing and executing the competitive tender process, and assisting the government in achieving financial close.

    The deadline for interested firms to submit EoIs is 21 August.

    Azerbaijan has previously used the PPP model to attract private investment into large infrastructure projects, including in the water and renewable energy sectors.

    The country’s first PPP tender in the water sector was for a seawater reverse osmosis desalination plant at Sumgayit Industrial Park, northwest of Baku.

    As previously reported, a consortium of Saudi Arabia’s Acwa and Turkiye’s IC Ictas Insaat Sanayi ve Ticaret won the contract to develop the $400m plant, which will have a capacity of 300,000 cm/d.

    In September 2025, Acwa signed agreements with the government of Azerbaijan covering a public‑private partnership agreement, a land lease, a sovereign undertaking, and a product water sale and purchase agreement.

    The plant has a 27.5-year project term, with early commercial operations scheduled for the second half of 2028.

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

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17805572/main.jpg
    Mark Dowdall
  • Kuwait construction holds up despite regional strife

    29 July 2026

     

    Kuwait’s construction and transport sectors are emerging from one of their strongest periods on record, with contract awards totalling $5.5bn last year, close to the record $5.6bn set in 2024.

    Against that backdrop, momentum has held up better than expected in 2026. Awards in the construction and infrastructure sectors reached about $1.2bn in the period to 27 July, only marginally down from the $1.6bn recorded over the same period last year. Given the disruption to investor confidence and tender timelines across the Gulf caused by regional conflict, the near-flat comparison points to a market that has held its footing rather than stalled.

    That steadiness reflects a broader push to keep major projects moving even as the region navigates a more uncertain operating environment. Underpinning the momentum is the $4bn engineering, procurement and construction (EPC) contract awarded to China Communications Construction Company (CCCC) in late December for the remaining phases of Mubarak Al-Kabeer Port on Boubyan Island, covering dredging, marine works and terminal infrastructure.

    Although the deal predates the current period of regional disruption, it helped establish momentum that has carried into 2026, with Kuwait continuing to advance large-scale schemes across ports, roads and utilities.

    This marks a notable shift for a market that, prior to its recent run, had a reputation for slow decision-making and a thin pipeline relative to regional peers. Contractors and consultants point to a steadier flow of tenders reaching the award stage this year, even with overall values marginally below last year’s pace – a gap narrow enough to suggest Kuwait’s pipeline has proven more insulated from regional volatility than many expected.

    Infrastructure pipeline

    Kuwait’s infrastructure pipeline is now approaching $16bn, spanning ports, roads and utilities projects at various stages of tendering and execution. The most recent addition came at Shuaiba Port, Kuwait’s oldest and principal industrial gateway, where the Kuwait Ports Authority (KPA) received bids in July for infrastructure and electrical modernisation works.

    The package sits alongside longer-term plans for Shuaiba. Since December, KPA has been in talks with Abu Dhabi’s AD Ports Group over a possible concession to develop a new container terminal, adding to a pipeline that already includes upgrade works at Shuwaikh and Doha ports under KPA’s wider tender programme.

    Elsewhere, Kuwait’s Public Authority for Housing Welfare (PAHW) has opened commercial bids for two major infrastructure and public buildings packages at South Al-Mutlaa Residential City. Local firm United Buildings Company has emerged as the lowest bidder on both, with combined offers worth KD44m covering the construction, completion and maintenance of services, infrastructure and public buildings across different district centres.

    Tendering is also under way for the estimated KD222m ($718m) rainwater drainage networks serving Sabah Al-Ahmad, South Sabah Al-Ahmad, Al-Khairan and Al-Wafra. The works comprise a major concrete sewer, three collection basins and an extensive stormwater drainage network, with collection tanks linked through an independent system that discharges to sea via the Nuwaiseeb outlet.

    Construction gains pace

    This infrastructure momentum has been mirrored in the construction sector, where Kuwait awarded an estimated $232m contract to China State Construction Engineering Corporation (CSCEC) in mid-July to construct the new headquarters of the Kuwait Direct Investment Promotion Authority (KDIPA). The contract covers a 275-metre, 55-storey office tower in Kuwait City’s Sharq district, targeted for completion in the second quarter of 2028.

    Beyond the KDIPA award, several schemes forming part of Kuwait’s estimated $36bn construction pipeline are expected to progress in the coming months.

    The largest is the first phase of the planned $22bn Sabriya City project, for which Beijing- and Shanghai-listed Metallurgical Corporation of China (MCC) is expected to sign one of the main contracts. MCC presented a fully funded proposal to Kuwaiti ministers for the city last year. The project is expected to include 52,000 housing units, alongside a power plant, hospital and marina.

    Consultants are meanwhile bidding for the design and supervision of the estimated $580m service hub buildings at Al-Mutlaa Health City, a project spanning more than 351,000 square metres.

    The Kuwait Authority for Partnership Projects (Kapp) has also awarded two landmark public-private partnership (PPP) deals this year.

    In January, it awarded an estimated $252m contract to develop the Al-Muthanna Complex real estate project to a local consortium comprising Real Estate House, National Investments Company, Arkan Kuwait Real Estate Company, Beyout Holding Company and Osoul Investment Company. The contract covers the rehabilitation, development, operation and management of the complex under a 15-year usufruct arrangement.

    In February, United Real Estate Company was awarded the third phase of a waterfront real estate project in Sharq, Kuwait City, under a similar 15-year arrangement covering rehabilitation, development, operation and management.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17805093/main.gif
    Yasir Iqbal