ADNOC Gas advances UAE’s gas infrastructure with $550m EPC contracts for ESTIDAMA project

ADNOC Gas plc has unveiled major enhancements to the UAE’s gas pipeline infrastructure through the ESTIDAMA Project, marking a significant stride in the region’s energy sector. The company announced the award of engineering, procurement, and construction (EPC) contracts totaling $550 million (AED 2 billion) to NMDC Energy P.J.S.C and Galfar Engineering & Contracting W.L.L Emirates, aimed at expanding the UAE’s natural gas pipeline network.

Approximately 70% of the contract’s value is projected to circulate back into the UAE economy via ADNOC’s In-Country Value (ICV) program, which supports local economic growth and diversification. The ESTIDAMA project will extend ADNOC Gas’s pipeline network from about 3,200 kilometers to over 3,500 kilometers, significantly increasing the transportation of natural gas to the Northern Emirates.

In a strategic move, ownership of the ESTIDAMA project has transitioned from ADNOC Gas to ADNOC, optimizing capital efficiency for ADNOC Gas. Despite this shift, ADNOC Gas will maintain management of the project, capitalizing on its established expertise in construction and pipeline operations, with ADNOC covering the capital expenditures.

Dr. Ahmed Alebri, Chief Executive Officer of ADNOC Gas, highlighted the project’s role in expanding access to lower-cost and sustainable natural gas across the UAE, aligning with the nation’s objectives of achieving gas self-sufficiency and supporting economic expansion.

The ESTIDAMA pipeline project is part of a broader initiative, with several packages valued at $2.4 billion in total. The first contract, awarded in 2021 and completed in 2023, involved modifications to existing pipelines. The latest contracts, awarded in July 2023, encompass the construction of new pipelines and a gas compression plant at ADNOC’s Habshan complex, facilitating the delivery of essential feed gas to key UAE customers.

ADNOC Gas remains dedicated to the ongoing management and expansion of the ESTIDAMA project while pursuing other significant growth initiatives. The company plans to invest over $13 billion in domestic and international opportunities between 2024 and 2028, expecting to grow its EBITDA by up to 40% during this period.