$550m contracts to expand UAE gas infrastructure

ADNOC Gas, the global gas processing company, today announced the award of engineering, procurement and construction contracts for the remaining packages of the UAE’s Sustainability Natural Gas Pipeline Expansion Project.

It was also decided, separately, to transfer the ownership of the Sustainability Project from ADNOC Gas to ADNOC, with the aim of improving the efficiency of the company’s capital expenditures.

The engineering, procurement and construction contracts, worth AED 2 billion ($550 million), were awarded to National Marine Dredging Group and Galfar Engineering and Contracting.

Approximately 70 percent of the value of the contracts will be redirected to the local economy through ADNOC’s National Content Enhancement Program to support and diversify local economic growth.

The Estidama project aims to increase the length of the natural gas pipeline network operated by the company from 3,200 km to more than 3,500 km, allowing for the transfer of larger quantities of natural gas to customers in the Northern Emirates.

Following the completion of the transfer of ownership of the Estidama project, ADNOC Gas will continue to manage the project, leveraging its expertise in pipeline construction and management.

ADNOC will cover the capital expenditure for this vital infrastructure project.

Ahmed Mohamed Al Abri, CEO of ADNOC Gas, said: “The new contracts support the continued expansion of the UAE’s pipeline network, which will contribute to the sustainable supply of low-cost natural gas to more locations in the country. We are proud to be leading the way in meeting the growing demand for gas locally, and enabling the UAE to achieve its goal of gas self-sufficiency.”

He added: Following the decision to transfer ownership of the “Sustainability” project to “ADNOC”, the company will continue to benefit from the expansion of the pipeline network and improve the efficiency of capital expenditures to achieve maximum value for the company’s shareholders.

It is noteworthy that ADNOC Gas continues to expand its local business through the Sustainability Project, and will pay a variable transportation fee to ADNOC in return for the actual production of the pipeline.

The company will also receive financial compensation for its management and maintenance of the project on behalf of ADNOC.