ADNOC Gas, a subsidiary of ADNOC, has awarded $550m contracts to NMDC Energy and Galfar Engineering & Contracting W.L.L Emirates pertaining to the next phase of the UAE sales gas pipeline network enhancement ESTIDAMA Project (ESTIDAMA).
The engineering, procurement & construction (EPC) contracts are aimed at expanding the gas infrastructure in the UAE apart from increasing customer reach.
According to ADNOC Gas, roughly 70% of the contract value is projected to circulate within the UAE economy under ADNOC’s in-country value (ICV) programme.
ADNOC Gas has also announced that ownership of ESTIDAMA is being transferred from the company to ADNOC. This move is aimed at optimising ADNOC Gas’ capital efficiency significantly.
ADNOC Gas CEO Ahmed Alebri said: “This award supports the ongoing expansion of the UAE’s gas pipeline network, which will bring lower-cost and sustainable natural gas to more locations across the country.
“We are proud to play a leading role in meeting the growing demand for gas across the country and enabling the UAE’s goal of gas self-sufficiency.
“With the transfer of ownership of the ESTIDAMA Project to ADNOC, ADNOC Gas will continue to benefit from the expansion of the pipeline networks, while improving our capital efficiency to ensure that we maximise value for our shareholders.”
The ESTIDAMA project is expected to expand ADNOC Gas’ UAE natural gas pipeline network from approximately 3,200km to over 3,500km, facilitating increased natural gas transport to customers in the Northern Emirates.
Following the transfer, ADNOC Gas will continue managing ESTIDAMA, leveraging its construction and pipeline operations expertise, while ADNOC will fund the infrastructure’s capital expenditures.
ADNOC Gas plans to expand its domestic operations through ESTIDAMA, paying ADNOC a variable transmission fee based on pipeline throughput.
The ADNOC subsidiary will operate and maintain ESTIDAMA on ADNOC’s behalf. The ESTIDAMA pipeline project, encompasses multiple packages, valued at $2.4bn.
The first contract, awarded in 2021 and completed by 2023, involved early modifications to existing pipelines.
Subsequently, in July 2023, ADNOC awarded the second and third ESTIDAMA EPC contracts totalling $1.34bn. These contracts include constructing new pipelines and a gas compression plant at ADNOC’s Habshan complex to supply critical feed gas to key customers nationwide.
