ADNOC Gas Revenue Tops $6B for Third Straight Quarter on Higher Demand. ADNOC Gas PLC collected $6.1 billion in revenue for the second quarter, up 13 percent compared to the same three-month period last year on stronger domestic demand, the Abu Dhabi National Oil Co. (ADNOC) subsidiary reported Monday.
April–June 2024 marked the third quarter in a row that ADNOC Gas’ revenue surpassed $6 billion, riding growing gas needs in the United Arab Emirates including in the petrochemical sector, it said in a statement on its website.
“Within the UAE, increased population and industrial growth have contributed to stronger sales for the domestic gas business”, the company stated. “ADNOC Gas fulfills more than 60 percent of the UAE’s gas demand and is fueling the development of key industrial sectors of the nation, including the growth of petrochemicals”.
It posted $1.2 billion in net income adjusted for nonrecurring or extraordinary items, up 21 percent year-on-year and above market expectations, the company said.
EBITDA rose 18 percent year-over-year to $2.1 billion. “The company’s EBITDA margin of 34 percent is underpinned by high sales demand and the benefits of its long duration gas supply and purchase agreement and ADNOC Gas’ integral role in powering and enabling the UAE’s Industrial diversification and growth”, ADNOC Gas said.
It declared a five percent year-on-year increase in interim dividend to $1.7 billion, with $3.41 billion to be distributed for the full year. ADNOC Gas had declared $3.25 billion in dividends for 2023, according to a company announcement April 1, 2024, in which it unveiled a plan to raise annual dividends by five percent over the next four years.
“We are well positioned to pursue our ambitious growth agenda, underpinned by the strength, expansion, and ambition of the UAE market”, ADNOC Gas chief executive Ahmed Alebri said about the company’s second quarter performance.
Global Expansion
Last month parent company ADNOC said agreements had been signed to farm out a 40 percent ownership in ADNOC’s largest natural gas liquefaction project to BP PLC, Mitsui & Co. Ltd., Shell PLC and TotalEnergies SE.
The companies separately signed up for a 10 percent interest each in the liquefied natural gas (LNG) export plant in Al Ruwais Industrial City, planned to have two trains with a combined production capacity of 9.6 million metric tons per annum (MMtpa), ADNOC said in a press release July 10, 2024. The state-owned company keeps a 60 percent ownership of Ruwais LNG after the finalization of the deals.
Targeted to be put into production 2028, the facility would more than double ADNOC’s LNG output, according to the company. Last year, the UAE was the third biggest LNG exporter among Middle Eastern countries, sending out a total of 7.7 billion cubic meters (271.9 billion cubic feet), behind Qatar (first) and Oman (second), according to the Energy Institute’s “Statistical Review of World Energy”.
Simultaneous with the investment agreements, Shell subsidiary Shell International Trading Middle East Ltd. FZE inked a deal to buy one MMtpa from the project. Japan’s Mitsui also simultaneously penned an offtake of 600,000 metric tons a year. Ruwais LNG had offtake pacts for 70 percent of its output capacity as of the time of the farmout announcement.
On June 12, 2024, ADNOC announced the final investment decision and the award of a $5.5 billion engineering, procurement and construction contract for the project.
Meanwhile, in a separate project to expand ADNOC’s domestic distribution network, ADNOC Gas said July 15, 2024, it had awarded engineering, procurement and construction contracts worth a combined $550 million for ESTIDAMA.
ADNOC Gas said at the time the ownership of the gas sales pipeline was being transferred to its parent company. After the transfer, ADNOC will cover capital expenses while ESTIDAMA management remains under ADNOC Gas.
ESTIDAMA will extend the UAE’s gas pipeline network from about 3,200 kilometers (1,988.4 miles) to over 3,500 kilometers (2,174.8 miles). The project will raise volumes for customers in the northern part of the Gulf country.
Last year ADNOC Gas awarded $1.34 billion ESTIDAMA contracts for the construction of new pipelines and a gas compression plant. The compression plant will support increased gas production from the Habshan complex west of Abu Dhabi, according to a press release by co-contractor Petrofac Emirates LLC June 30, 2023.
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