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.
Exclusive from Meed
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Taqa caps 2024 with $1.9bn net income
13 February 2025
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Jafurah cogeneration plant expansion talks start
13 February 2025
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Ewec invites Al-Sila wind bids
13 February 2025
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Firms submit Saudi Lenovo production plant bids
13 February 2025
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Ninety express interest for Taif airport PPP
13 February 2025
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Taqa caps 2024 with $1.9bn net income
13 February 2025
Abu Dhabi National Energy Company (Taqa) completed its full 2024 fiscal year with a net income of AED7.1bn ($1.9bn) on the back of revenues that reached AED55.2bn.
The previous year’s net income is only 1.5% higher compared to the prior year, excluding one-off items worth AED10.8bn related to the acquisition of a 5% stake in Adnoc Gas and AED1.1bn deferred tax charge due to the introduction of the UAE corporate tax.
The company’s ebitda rose 5.9%, to AED21.4bn, in 2024. However, this declined by 31% compared to the prior year if the AED10.8bn acquisition of a 5% stake in Adnoc Gas is considered.
The firm’s capital expenditure rose by 63.8% due to the construction of the Mirfa 2 and Shuweihat 4 seawater reverse osmosis (SWRO) plants, as well as the “timing and phasing of project execution” within its transmission and distribution (T&D) division and the inclusion of Taqa Water Solutions, formerly known as SWS Holding before its acquisition by Taqa last year.
Taqa’s free cash flow generation dipped from AED13.9bn in 2023 to AED2.6bn last year, reflecting “increased investments in Masdar, capital investment across generation, T&D and water solutions, and the acceleration of decommissioning activities within oil and gas”.
Gross debt rose from AED61.7bn at the end of 2023 to AED64.1bn due to the issuance of an aggregate AED6.4bn in seven-year and 12-year dual-tranche corporate bonds, consolidation of AED1.5bn in project debt from the acquisition of SWS Holding and AED1.4bn for the construction of the Mirffa 2 and Shuweihat 4 desalination projects.
This was offset by the repayment of AED3.5bn in matured corporate bonds, AED2.9bn in scheduled loan repayments and AED500m of other minor movements.
Some of the firm’s highlights in 2024 included merging Abu Dhabi Distribution Company (ADDC) and Al-Ain Distribution Company (AADC) into one brand, known as Taqa Distribution.
Taqa also continued to focus on Saudi Arabia, having reached financial close with its partners last year for the Juranah independent strategic water reservoir project and the Najim cogeneration plant project.
Along with partners Japan’s Jera and the Saudi firm Albawani, Taqa signed two 25-year power-purchase agreements with the Saudi principal buyer last year for the Rumah 2 and Nairiyah 2 combined-cycle gas turbine power plants, which have a combined generation capacity of 3.6GW.
Global expansion
Last year, Taqa acquired a 50% stake in US-based Terra-Gen Power Holdings II, while in Europe and through Abu Dhabi Future Energy Company (Masdar), it completed the acquisition of Saeta Yield from Brookfield Renewable.
Masdar and Spain’s Endesa finalised a partnership agreement last year, with Masdar acquiring a 49.99% stake in EGPE Solar, an Endesa subsidiary. Masdar also acquired Greece’s Terna Energy, which had an operating capacity of 1.2GW at the time of acquisition and is targeting 6GW of operational renewable capacity by 2029.
Oil and gas
In terms of the firm’s oil and gas business, it concluded the sale of its stake in the Atrush oil field in the Kurdish Region of Iraq in 2024.
The firm said it is also making “significant progress” in the UK, transitioning its focus towards safe and efficient decommissioning.
The firm ended production in the Northern North Sea with the cessation of production at its North Cormorant, Cormorant Alpha, Eider and Tern platforms.
Onshore gas production in the Netherlands also ceased in 2024, 50 years after the start of production in the Dutch Alkmaar region, said Taqa.
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Jafurah cogeneration plant expansion talks start
13 February 2025
Saudi Aramco and Korea Electric Power Corporation (Kepco) are understood to be undertaking talks to expand the capacity of the $500m Jafurah cogeneration independent steam and power plant (ISPP) in Saudi Arabia.
The construction of the facility is nearing completion and negotiations have started for phase 2 of the project, a source close to the project tells MEED.
At the time of its procurement, the plant's first phase was to have a power capacity of 270-320MW, and a low-pressure (LP) steam demand of 77-166 thousand pounds an hour (klb/hr) and high-pressure (HP) steam demand of 29-126 klb/hour by 2023.
The LP and HP steam demand will increase to 283-373 klb/hr and 66-321 klb/hr, respectively, by 2027.
The oil giant issued the letter of award to Kepco for the contract to develop the Jafurah ISPP scheme in July 2022.
The South Korean utility developer and investor saw off competition from two Saudi-headquartered firms, Acwa Power and Al-Jomaih, to win the contract.
Kepco subsequently awarded South Korea’s Doosan Heavy Industries & Construction the project’s engineering, procurement and construction (EPC) contract.
US/India-based Synergy Consulting provided financial advisory services to Kepco on its bid.
Sumitomo Mitsui Banking Corporation (SMBC) served as the client's financial adviser for the project. Germany’s Fichtner Consulting Engineers is technical consultant, while the UK’s Wood Group is project management consultant.
Unconventional programme
The Jafurah gas development is part of Aramco’s $3.2bn unconventional resources programme, which aims to develop shale gas in three areas. Jafurah lies southeast of Ghawar, the world’s largest conventional oil field.
As part of the Vision 2030 masterplan, Riyadh aims to ensure the kingdom remains self-sufficient in gas supply in the face of rising demand from the residential and industrial power sectors.
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Ewec invites Al-Sila wind bids
13 February 2025
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Abu Dhabi state offtaker Emirates Water & Electricity Company (Ewec) has invited prequalified developers to submit their proposals for a contract to develop a 140MW wind power project in Abu Dhabi.
The Al-Sila wind independent power project is a greenfield renewable energy project with a generation capacity of up to 140MW. When fully operational, it will more than double the existing wind generation capacity in the UAE.
Ewec said it expects to receive bids by Q2 2025.
Companies understood to have expressed interest in bidding for the contract include Japan’s Marubeni Corporation and Jera, France’s Engie and EDF Renewables, Saudi Arabia’s Acwa Power and Alfanar, and Beijing-based PowerChina, among others.
Ewec has not disclosed the list of prequalified bidders, but industry sources say most of the companies that expressed interest also passed the prequalification phase.
The Al-Sila wind project will involve the development, financing, construction, operation, maintenance and ownership of the wind farm and associated infrastructure.
The project will follow Abu Dhabi’s independent power project (IPP) model, where developers enter into a long-term power-purchase agreement with Ewec as the sole procurer of electricity.
Ewec expects the project to generate enough clean electricity to power 36,000 homes, displacing 190,000 tonnes of carbon dioxide annually.
It will also directly contribute to Abu Dhabi’s Clean Energy Strategic Target 2035, which calls for 60% of electricity production to be generated by renewable and clean sources.
Together with the existing UAE wind assets, the new project will increase the UAE’s wind generation capacity to approximately 240MW, laying the foundation for further wind energy expansion, according to Ewec’s Statement of Future Capacity Requirements report.
In October last year, Ewec and Abu Dhabi Future Energy Company (Masdar) signed a power-purchase agreement for several wind power plants in Abu Dhabi and Fujairah, with a combined capacity of over 100MW.
Their locations and capacities are:
- Sir Baniyas Island (Abu Dhabi): 45MW
- Delma Island (Abu Dhabi): 27MW
- Al-Sila Abu Dhabi: 27MW
- Al-Halah (Fujairah): 4.5MW
Masdar developed the 103.5MW wind power projects, which use “the latest technology and innovation to capture low wind speeds at utility scale, adopting advances in material science and aerodynamics to make wind power possible in the country”.
The Al-Sila wind farm takes the total number of IPPs under various procurement stages in Abu Dhabi to six. The other schemes are:
- Taweelah C combined-cycle gas turbine plant: 2,500MW
- Madinat Zayed open-cycle gas turbine plant: 1,500MW
- Al-Khazna solar IPP: 1,500MW
- Al-Zarraf solar IPP: 1,500MW
- Battery energy storage system (Bess) 1: 400MW
These IPPs have a total combined capacity of over 7,000MW.
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Firms submit Saudi Lenovo production plant bids
13 February 2025
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Contractors have submitted proposals to build a manufacturing facility in Riyadh for Chinese computer maker Lenovo.
MEED understands that the proposals for the project, known as the Oasis Project, were submitted on 10 February.
The tender notice was issued on 3 January.
The manufacturing facility will be constructed on a 200,000 square-metre site at the Special Integrated Logistics Zone at King Khalid International airport in Riyadh.
The plan is for the construction works to be undertaken in two phases, both of which are expected to be operational by 2026.
The project’s first phase involves the construction of the first plant building, main office building, warehouses, other buildings and associated infrastructure. Completion is expected by January 2026.
The second phase covers the construction of the second plant building and other associated buildings. The second phase is expected to be completed by August 2026.
According to local media reports, Alat, a subsidiary of Saudi Arabia’s Public Investment Fund (PIF), and Lenovo broke ground on the manufacturing facility on 9 February.
Lenovo secured a $2bn investment deal with Alat to manufacture computer devices in the kingdom in January.
In May 2024, Lenovo signed a collaboration agreement with Alat to set up a manufacturing facility in Saudi Arabia.
The funding will also support Lenovo in establishing a regional headquarters for the Middle East and Africa market in Riyadh. The headquarters will include customer centres, research and development centres, and manufacturing facilities for personal computers and servers.
In February last year, the PIF unveiled its $100bn capital-backed company Alat, which aims to transform Saudi Arabia into a global hub for electronics and advanced industries.
The company aims to create 39,000 direct jobs and achieve a direct non-oil GDP contribution of $9.3bn in Saudi Arabia by 2030.
It was reported that Alat would have seven business units focusing on areas such as semiconductors, artificial intelligence, next-generation infrastructure, and smart appliances and smart buildings.
According to the PIF, Alat will manufacture more than 30 product categories, including robotic systems, communications systems, advanced computers and digital entertainment products, as well as advanced heavy machinery used in construction, building and mining.
Alat is expected to focus on providing sustainable manufacturing solutions for international companies by accessing clean energy resources in Saudi Arabia to reach carbon-neutral goals by 2060, while the PIF’s own goal is to be carbon-neutral by 2050.
According to GlobalData, China is the largest producer of laptops, manufacturing a significant portion of the world’s supply. In recent years, it has faced challenges due to supply chain disruptions, including the impact of the Covid-19 pandemic and geopolitical tensions, particularly affecting markets like Ukraine and Russia.
Following China, the US also plays a crucial role in laptop production, with major companies like Dell and HP operating extensively within the country. South Korea, Japan and Taiwan are also notable players in the laptop manufacturing sector.
South Korea is reported to produce about 20% of the global supply of semiconductors, which are essential for laptop production, while Taiwan is recognised for its advanced semiconductor manufacturing capabilities. Additionally, India is working to enhance its domestic laptop production, although it currently imports over 80% of the laptops in use.
Driving tech in the Middle East
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Published on 1 February 2025 and distributed to senior decision-makers in the region and around the world, the February MEED Business Review includes:
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Ninety express interest for Taif airport PPP
13 February 2025
Some 90 firms have expressed interest in bidding for a contract to develop and operate a new international airport in Taif in the kingdom’s Mecca province.
Saudi Arabia’s Matarat Holding, through the National Centre for Privatisation & PPP (NCP), invited firms to express interest in bidding for the contract in early December.
The international and local firms that expressed their interest are:
- Abdul Ali Al-Ajmi Company (local)
- Abrdn Investcorp Infrastructure Investments (UK)
- Aeroporti Di Roma (Italy)
- Algihaz Holding (local)
- Al-Jaber Contracting (local)
- Al-Modon Al-Arabia Company (local)
- Al-Rashid Trading & Contracting Company (local)
- Al-Sharif Contracting & Commercial Development (local)
- Al-Yamama Company for Trading & Contracting (local)
- Al-Ayuni Investment & Contracting Company (local)
- Alghanim International General Trading & Contracting (Kuwait)
- Almabani General Contractors (local)
- Almansouryah Company General Contracting (local)
- AlMozaini Real Estate (local)
- Almutlaq Real Estate Investment Company (local)
- Alternative Resources Investment
- Annasban Group (local)
- Asyad Holding Company (local)
- AVIC-KDN Airport Engineering (China)
- Bangalore International Airport (India)
- Binladin International (local)
- Bouygues Batiment (France)
- CACC International Engineering
- China Harbour Engineering Company (China)
- Surbana Consultants (Singapore)
- Buna Al-Khaleej Contracting (local)
- China National Aero-Technology International Engineering Corporation (China)
- China Railway Construction Corporation (China)
- Clavrix (US)
- Consolidated Contractors Company (Greece)
- Contrax International (UAE)
- Corporacion America Airports (Luxembourg)
- Currie & Brown (UK)
- DAA International (Dublin Airport Authority, Ireland)
- Dar Al-Handasah Consultants (Shair & Partners, Lebanon)
- DG Jones & Partners (UAE)
- EB Cornerstone (UK)
- Edgenta Arabia (Malaysia)
- Egis Project (France)
- Enzar Company for Operation & Maintenance (local)
- Erada Advanced Projects (local)
- EXP Arabia (Canada)
- FAS Energy (local)
- Ghesa Ingeniera Technologia (Spain)
- GMR Airports (India)
- Gulf Investment Corporation (Kuwait)
- Haji Abdullah AliReza & Company (local)
- IC Ictas (Turkiye)
- Indiza Airport Management (South Africa)
- Innovative Contractors for Advanced Dimensions (ICAD, local)
- International Energy (local)
- Kalyon Insaat (Turkiye)
- Kolin Insaat (Turkiye)
- Korea Airports Corporation (South Korea)
- Koushan Real Estate Development Company (local)
- Lamar Holding (local)
- Limak Insaat (Turkiye)
- Lynx Contracting Company (local)
- Mada International Holding Company (local)
- Makyol Insaat (local)
- Manchester Airport Group (UK)
- Middle East Tasks (local)
- Modern Airports (local)
- Mota-Engil (Portugal)
- Mowah Company (local)
- Munich Airport International (Germany)
- Namaya Investment Company (local)
- Nasser Abdullah Abu Sarhad (local)
- National Transportation Solution Company (local)
- Nesma & Partners (local)
- Nesma Company (local)
- Pini Group (Switzerland)
- Ports Projects Management & Development Company (local)
- Salso & Associates (Greece)
- Samsung C&T Corporation (South Korea)
- Sarh Developments (local)
- Saudi Arabian Trading & Construction Company (local)
- Saudi Binladin Group (local)
- Saudi Building Technic Maintenance Company (local)
- Skilled Engineers Contracting (local)
- Sumou Real Estate Company (local)
- Tamasuk Holding Company (local)
- Tatweer Buildings Company (local)
- Tav Airports Holding (Turkiye)
- Technical Development Company for Contracting (local)
- Terminal Yapi Ve Ticaret (Turkiye)
- Vantage Group (Australia)
- Vision International Investment Company (local)
- WCT International (Malaysia)
- Zamil Group (local)
The new Taif International airport will be located 21 kilometres southeast of the existing Taif airport, with a capacity to accommodate 2.5 million passengers by 2030.
The clients opted for a 30-year build-transfer-operate (BTO) contract model, including the construction period.
In addition to a new airport terminal, the proposed design features a runway with a full-length parallel taxiway connecting to a single commercial apron.
The scope includes facility buildings, utility networks, car parks and access roads, as well as provisions for additional expansions to meet future subsystem requirements.
The new Taif International airport is expected to meet the projected increase in demand by 2055 and contribute to the economic development of Taif city and its surrounding areas, in line with the kingdom’s National Aviation Strategy.
It is also expected to meet the needs of Umrah pilgrims as a viable alternative within the region’s multi-airport system, which includes King Abdulaziz Airport in Jeddah, Prince Mohammed Bin Abdulaziz Airport in Medina and Prince Abdulmohsen Bin Abdulaziz Airport in Yanbu.
Other airport PPPs
In addition to the Taif International project, three other airports comprise the first stage of Saudi Arabia’s latest plan to modernise and privatise its international and domestic airports.
The other planned airport public-private partnership (PPP) schemes are in Abha, Hail and Qassim.
Matarat and NCP recently tendered the contract to develop and operate a new passenger terminal building and related facilities at Abha International airport. They expect to receive bids by April.
Located in Asir province, the first phase of the Abha International airport PPP project is set for completion in 2028. It will increase the airport terminal area from 10,500 square metres (sq m) to 65,000 sq m.
The contract scope includes a new rapid-exit taxiway on the current runway, a new apron to serve the new terminal, access roads to the new terminal building and a new car park area. The scope also includes support facilities such as an electrical substation expansion and a new sewage treatment plant.
The transaction advisory team for the client on the Abha airport PPP scheme comprises UK-headquartered Deloitte and Ashurst as financial and legal advisers, respectively, and ALG as technical adviser.
Previous tenders
The Taif, Hail and Qassim airport schemes were previously tendered and awarded as PPP projects using a BTO model.
Saudi Arabia’s General Authority of Civil Aviation (Gaca) awarded the contracts to develop four airport PPP projects to two separate consortiums in 2017.
A team of Tukey’s TAV Airports and the local Al-Rajhi Holding Group won the 30-year concession agreement to build, transfer and operate airport passenger terminals in Yanbu, Qassim and Hail.
A second team, comprising Lebanon’s Consolidated Contractors Company, Germany’s Munich Airport International and local firm Asyad Group, won the BTO contract to develop Taif International airport.
However, these projects stalled following the restructuring of the kingdom’s aviation sector.
Saudi Arabia has already privatised airports, including the $1.2bn Prince Mohammed Bin Abdulaziz International airport in Medina, which was developed as a PPP and opened in 2015.
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