Adnoc Gas PLC has recently announced the award of engineering, procurement, and construction (EPC) contracts for the next phase of the UAE sales gas pipeline network enhancement project, known as Estidama. The contracts were awarded to NMDC Energy P.J.S.C and Galfar Engineering & Contracting W.L.L Emirates, with a combined value of $550 million (Dh2 billion). This project aims to extend the UAE’s natural gas pipeline network, operated by Adnoc Gas, from approximately 3,200km to over 3,500km, allowing for the transportation of higher volumes of natural gas to customers in the northern Emirates of the UAE.
Moreover, ownership of the Estidama project will be transferred from Adnoc Gas to Adnoc, resulting in significant capital efficiency for Adnoc Gas. Following the ownership transfer, Adnoc Gas will continue to manage Estidama and leverage its expertise in construction and pipeline operations, while Adnoc will cover the capital expenditures for this critical infrastructure project. This move is expected to further enhance the expansion of the pipeline networks, meeting the growing demand for gas across the country and enabling the UAE’s goal of gas self-sufficiency.
Approximately 70% of the contracts’ value is projected to flow back into the UAE economy through Adnoc’s In-Country Value (ICV) program, supporting local economic growth and diversification. This initiative reflects Adnoc’s commitment to fostering a sustainable and thriving economy by prioritizing local businesses and creating opportunities for growth within the region. The Estidama project is a testament to Adnoc’s dedication to developing robust infrastructure that not only meets the country’s energy needs but also contributes to economic development.
Dr. Ahmed Alebri, the Chief Executive Officer of Adnoc Gas, emphasized the importance of the Estidama project in expanding the UAE’s gas pipeline network, which will enable the transportation of lower-cost and sustainable natural gas to various locations across the country. The project’s focus on enhancing the gas infrastructure aligns with the UAE’s objective of achieving gas self-sufficiency and ensuring energy security for its citizens. By prioritizing the expansion of the pipeline networks, Adnoc Gas is playing a key role in meeting the growing demand for gas in the country.
As part of the Estidama project, Adnoc Gas will continue to expand its domestic business by paying a variable transmission fee for the actual throughput of the pipeline. Additionally, Adnoc Gas will be paid to operate and maintain Estidama on behalf of Adnoc, further solidifying its role in ensuring the efficient and effective operation of the gas pipeline network in the UAE. This strategic approach to managing the project highlights Adnoc’s commitment to optimizing value for its shareholders while meeting the energy needs of the country.
In conclusion, the award of EPC contracts for the Estidama project represents a significant milestone in the expansion of the UAE’s gas pipeline network. With a focus on enhancing infrastructure, optimizing capital efficiency, and supporting local economic growth through the ICV program, Adnoc Gas is well-positioned to contribute to the country’s energy security and economic development. By leveraging its expertise in construction and pipeline operations, Adnoc Gas is set to play a crucial role in meeting the growing demand for natural gas in the UAE and ensuring the sustainable growth of the energy sector.
