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Adnoc Gas is set to acquire a 60% stake in the Ruwais LNG project from its parent group Adnoc in 2H 2028 at cost, for an estimated value of USD 5 bn, the company said in a press release (pdf). The plant’s first production unit is slated to come online in 2H 2028, with the second following in early 2029.
Ownership breakdown: Global energy giants Shell, BP, TotalEnergies, and Japan’s Mitsui own the remaining 40% stake in Ruwais, at a 10% stake each. They acquired the stakes in July.
Adnoc Gas has had its eyes on Ruwais from the start: “It has always been our intention to acquire Adnoc’s 60% stake in Ruwais LNG. This investment is a central component of our ambitious international growth plans and will strengthen Adnoc Gas’ position as a powerhouse in the global LNG market,” Adnoc Gas CEO Ahmed Mohamed Alebri said in the statement. We knew this was planned since earlier this year.
Adnoc Gas will dispatch the first cargo from the Ruwais facility in late 2028, Adnoc Gas CFO Peter Van Driel said in a virtual media roundtable attended by EnterpriseAM UAE. The company is currently kicking off construction works at Ruwais, Van Driel added, noting that the new plant will help serve gas demand of “countries either in Europe, the Far East, or in Asia.”
Ruwais already has offtake agreements lined up: The company has sold 75% of Ruwais’ total production capacity to international customers, Van Driel said. The sold volumes are equivalent to over 7 mn tons per annum (mtpa) of the total 9.6 mtpa of LNG.
ICYMI- The signed offtake agreements include a 15-year agreement with China’s ENN Natural Gas to deliver 1 mn tons of LNG annually from Ruwais, along with another 15-year agreement with German energy giant Energie Baden-Württemberg to supply it with 0.6 mn tonnes of LNG per year. Adnoc also signed long-term LNG supply agreements to deliver 1.6 mn tonnes per year from the new plant, with 1 mn metric tonnes to Shell and 0.6 mn tons to Mitsui. Most recently, Adnoc secured a 15-year sales and purchase agreement (SPA) with Sefe Marketing & Trading Singapore for 1 mn tonnes of LNG.
We’ll soon hear of more purchase agreements from Ruwais: In the coming months, Adnoc Gas expects to reveal “many more HOAs being converted into final [offtake] agreements,” Van Driel said, without disclosing the names of the companies or a timeline for the agreements.
Adnoc Gas ramps up spending to USD 15 bn, to pour heavily in infrastructure: The company has raised its five-year capex plan to USD 15 bn, up from an earlier USD 13 bn, to fund projects “which will enable us to capture opportunities from the forecast increase in domestic and global demand for the lower carbon gasses we produce,” says Alebri. The expanded spending plan will be “very much focused on new infrastructure,” according to Van Driel.
REFRESHER- In April, Adnoc Gas revealed its plan to invest USD 13 bn over the next five years in both domestic and international markets to help the firm expand its processing capacity and reach more customers.
Demand growth is behind the move: Adnoc Gas has ramped up capex plans to meet an expected 6% annual growth in demand through 2030, up from the initial projection of 2%, as the UAE’s GDP and population continue to expand alongside rising sectors like AI data centers and key industries. This increase in spending aims to boost EBITDA by 40% by 2029, enabling Adnoc to “process more raw gas from our supplier and sell it into the UAE market or export markets,” said Van Driel.
EARNINGS WATCH-
Adnoc Gas reported a 11% y-o-y increase in its net income, reaching USD 1.2 bn in 3Q 2024, according to its financials (pdf). The robust performance came higher than analysts’ expectation of USD 1.19 bn. The Adnoc subsidiary’s revenues climbed 8% y-o-y to USD 6.3 bn in 3Q, surpassing USD 6 bn for the fourth quarter thanks to “higher sales volumes and an improved price environment for export-traded liquids,” the company said in its earnings release (pdf).
On a nine-month basis, Adnoc Gas’ bottom line increased 18% y-o-y to USD 3.6 bn in 9M 2024. The company booked USD 18.4 bn in revenues, up 12% y-o-y in 9M 2024, achieving the strong revenue growth despite the mixed pricing environment, according to its earnings report (pdf). The revenue growth was underpinned by a 6.5% increase in export and traded liquids volumes, a 4.5% rise in gas sales, and a 3.5% growth in domestic gas volumes, the company said in its earnings release.
Looking ahead, Anoc Gas will focus on three major projects due by 2029, namely the Ruwais LNG project, alongside the “the Maximization of Ethane Recovery and Monetization (MERAM) project, which will deliver up to 3.4 mtpa of ethane and NGL production capacity [and] the IGD-E2 project, which will have a [daily] gas processing capacity of 370 mn standard cubic feet.”
Dividends: Adnoc Gas will distribute USD 3.4 bn in dividends for its 2024 earnings. This includes interim dividends of USD 1.7 bn, set to be distributed in April 2025.
