Energy

Adnoc Gas finance chief bullish on future demand

August 12, 2024, 12:14 PM

With demand increasing for Adnoc's gas across the UAE and elsewhere, it aims to increase capacity by 20% by 2028

20% capacity increase goal
Half of 2028 LNG sold already
UAE pipeline network planned

Adnoc Gas is aiming to increase capacity by one-fifth by 2028 to cope with increasing demand.

“That’s a combination of us making the most of what we already have, really utilising those assets, plus building new capacity,” chief financial officer Peter Van Driel said on Monday.

The company supplies nearly two-thirds of the UAE’s gas needs and has customers in more than 20 countries.

Van Driel said he expected global gas demand to increase by 14 percent by the end of the decade and dismissed forecasts from the International Energy Agency (IEA), which suggested oil and gas use would reach its peak by 2030.

“I go by the evidence and I see that, in the long term, we have committed sales,” he said.

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Adnoc Gas is building the first liquefied natural gas (LNG) facility in the Middle East and North Africa region to run on clean power.

The plant at Ruwais consists of two 4.8 million tonnes per annum (mtpa) LNG liquefaction trains with a total capacity of 9.6 mtpa. The facility will more than double Adnoc’s LNG production capacity to 15 mtpa.

Van Driel said more than 50 percent of output LNG that will come in 2028 has already been sold.

On Monday the Abu Dhabi-listed company announced a 21 percent year-on-year increase in net income for the second quarter to $1.2 billion. Revenues crossed the $6 billion mark for the third consecutive quarter and were up 13 percent compared with Q2 2023.

Shares in the company closed up 3 percent on Monday.

International sales make up two-thirds of the company’s revenues and although Adnoc Gas has been an active player in the global mergers and acquisitions market, Van Driel said the focus would be on homegrown projects.

“In the UAE, I have an established practice and we have an excellent reputation when it comes down to constructing large scale projects. I would never rule out M&A but the bar is quite high to undertake that successfully,” he said.

Adnoc Gas announced a 5 percent increase in its annual dividend per share, for a total distribution of $3.41 billion for the full year 2024.

The board of directors approved an interim dividend of $1.71 billion, which will be paid in September.

Last month Adnoc Gas awarded a $550 million engineering procurement and construction contract for the next phase of Estidama, its natural gas pipeline network project.

The scheme is designed to ensuring the sustainable supply of natural gas to more locations across the UAE, meet local demand, and enable self-sufficiency in gas.