Abu Dhabi National Oil Company (Adnoc Group) has set the share price range of its new subsidiary company, Adnoc Gas, at AED2.25-2.43 ($0.61-0.66) for its upcoming initial public offering (IPO), implying a targeted valuation of $47bn to $50.8bn.

Adnoc Group intends to list 4 per cent of shares in Adnoc Gas on the Abu Dhabi Securities Exchange (ADX) through the IPO, which consists of about 3.07 billion shares of Adnoc Gas.

Adnoc Group expects shares of Adnoc Gas to start trading on ADX from 13 March, subject to regulatory approvals.

The subscription period runs from 23 February to 1 March for retail investors, and from 23 February to 2 March for qualified investors.

Before the IPO, Adnoc Group transferred 5 per cent of shares of Adnoc Gas to Abu Dhabi National Energy Company (Taqa). Following the stock listing, Adnoc Group will hold 91 per cent of the share capital of Adnoc Gas.

Adnoc Gas has appointed Moelis & Company as the independent financial adviser for the IPO.

First Abu Dhabi Bank and HSBC Bank have been appointed joint global coordinators. Abu Dhabi Commercial Bank, Arqaam Capital, BNP Paribas, Deutsche Bank, EFG Hermes and International Securities have been selected as joint bookrunners.

Adnoc Gas appointed First Abu Dhabi Bank as the lead receiving bank and Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank and Al-Maryah Community Bank as the receiving banks.

Adnoc Gas expects to pay shareholders $3.3bn in total dividends for the full year 2023, payable in two equal parts, one in the last quarter of this year and the other in the second quarter of 2024.

Adnoc Gas business

In late November, Adnoc announced the creation of Adnoc Gas through the merger of its subsidiaries Adnoc Gas Processing and Adnoc LNG, as well as its intention to float shares of the new company on ADX.

Adnoc Gas began operating on 1 January. The company’s executive leadership team comprises Ahmed Mohamed Alebri as acting CEO, Peter Van Driel as chief financial officer and Mohamed al-Hashemi as chief operating officer.

The consolidation of Adnoc’s gas processing and liquefied natural gas (LNG) operations into Adnoc Gas has created one of the world’s largest gas processing entities with a processing capacity of about 10 billion standard cubic feet of gas a day across eight onshore and offshore sites, and a pipeline network of over 3,250 kilometres.

“Adnoc Gas expects to benefit from projected robust, long-term demand globally through its tangible growth opportunities, in view of the projected rise in gas demand in the next 25-30 years,” Adnoc Group said in its statement.

“Adnoc Gas is advantageously located in a strategically situated corridor with easy access to the largest and growing gas markets, which offers optionality to ship products both to Asia and Europe with sales in the spot market enabling selection of an optimal supply destination,” it added.

Adnoc Gas, which benefits from access to the world’s seventh-largest gas reserves, is progressing with major projects that are set to expand its business.