Adnoc Gas rules out project delays and sticks to capex plan

• First quarter profit up 7%
• Adnoc rules out project delays
• Final decision on Rich Gas expected

Adnoc Gas, a unit of Abu Dhabi National Oil Company (Adnoc), said it is ruling out project delays in its $15 billion, five-year capital expenditure plan, though two developments are still pending a final investment decision.

Adnoc Gas plans to make a final investment decision (FID) around mid-year on its Rich Gas Development project, which will add about 1.5 billion cubic feet per day (bcfd) of additional processing capacity, Peter van Driel, chief financial officer, said on a May 5 earnings webcast with analysts. 

The company’s first quarter net profit rose by 7 percent year on year to $1.3 billion. 

“The key point is that, in a lower oil price environment, the balance sheet is strong enough to carry any price environment,” said Van Driel. “We are not going to stall and start again after a few months. That is a way to destroy value.” 

Oil prices, which mainly impact Adnoc Gas’s export business, plummeted on Monday after eight Opec+ countries accelerated the addition of crude oil volumes for June for the second month in a row, even as global trade tensions reduce the outlook for global economic growth and energy demand.

“For now, take comfort in the $60-$80 per barrel range, and yes, we can push through it a bit further down, but it is not applicable if you go to extreme lows,” said Van Driel.  

The company, which meets 60 percent of the UAE’s gas needs, sells about two-thirds of its volumes to the domestic market and the remainder is exported mainly as liquefied natural gas and other liquids that are linked to global oil prices. 

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The company plans to expand its 10 bcfd gas processing capacity by 30 percent by 2029 and is spending $15 billion to help reach that target. That excludes capital expenditure on Rich Gas Development, and on Bab Gas Cap, a project that would add more than 1.8 bcfd once it reaches final investment decision next year.

“I am very comfortable that we can invest through the cycle and do our investments and deliver on our progress of 40 percent EBITDA growth [by 2029 vs 2023] while, at same time, honour our commitment to dividend growth,” Van Driel said. 

Adnoc Gas lowered its 2025 capital expenditure guidance to $3 billion from $3-$3.5 billion thanks to “capital discipline”, but spending will still remain higher than last year’s $1.84 billion due to work on expansion projects, the CFO said. 

The company also expects its total sales volumes, excluding sulphur, to be lower in 2025 than in 2024 due to planned shutdowns in some facilities.