ADNOC Gas has awarded engineering, procurement, and construction (EPC) contracts for the next phase of the UAE sales gas pipeline network enhancement, known as the “ESTIDAMA Project”.
The contracts, valued at a combined Dh2 billion ($550 million), were given to NMDC Energy P.J.S.C and Galfar Engineering & Contracting W.L.L Emirates.
Approximately 70% of the contracts’ value is expected to flow back into the UAE economy through ADNOC’s In-Country Value (ICV) programme, supporting local economic growth and diversification, the company said in a press release.
In a separate move, ownership of the ESTIDAMA Project will be transferred from ADNOC Gas to ADNOC, significantly optimising ADNOC Gas’s capital efficiency. This change will allow ADNOC to cover the capital expenditures for the project.
The ESTIDAMA Project will extend the UAE’s natural gas pipeline network from around 3,200 kilometres to over 3,500 kilometres, enabling the transportation of higher volumes of natural gas to customers in the Northern Emirates.
Dr. Ahmed Alebri, Chief Executive Officer of ADNOC Gas, said, “This award supports the ongoing expansion of the UAE’s gas pipeline network, which will bring lower-cost and sustainable natural gas to more locations across the country. We are proud to play a leading role in meeting the growing demand for gas across the country and enabling the UAE’s goal of gas self-sufficiency.
Following the ownership transfer, ADNOC Gas will continue to expand its domestic business through ESTIDAMA, paying ADNOC a variable transmission fee for the actual throughput of the pipeline. ADNOC Gas will also be compensated for operating and maintaining ESTIDAMA on behalf of ADNOC.
ADNOC Gas reported a 21% year-on-year surge in Q1 2024 net income to $1.18 billion, while its domestic gas net income unit margin improved by 20% during the same period.
