Adnoc Gas PLC has announced the award of engineering, procurement, and construction (EPC) contracts for the next phase of the UAE sales gas pipeline network enhancement, known as the 'Estidama Project'. Concurrently, the ownership of Estidama is being transferred from Adnoc Gas to Adnoc, which will significantly enhance Adnoc Gas' capital efficiency.
The EPC contracts, totaling $550 million (Dh2 billion), have been awarded to NMDC Energy P.J.S.C and Galfar Engineering & Contracting W.L.L Emirates. It is anticipated that approximately 70% of the contract value will be reinvested into the UAE economy through Adnoc's In-Country Value (ICV) program, fostering local economic growth and diversification.
Estidama will expand the UAE's natural gas pipeline network operated by Adnoc Gas from approximately 3,200km to over 3,500km, facilitating the transportation of increased volumes of natural gas to customers in the northern Emirates of the UAE. Following the ownership transfer, Adnoc Gas will continue to manage Estidama, utilizing its expertise in construction and pipeline operations, with Adnoc funding the capital expenditures for this vital infrastructure project.
Dr Ahmed Alebri, Chief Executive Officer of Adnoc Gas, stated, 'This award supports the continuous expansion of the UAE's gas pipeline network, delivering lower-cost and sustainable natural gas to more locations across the country. We are proud to lead in meeting the escalating demand for gas across the country and supporting 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 maximize value for our shareholders.'
Adnoc Gas will continue to expand its domestic business through Estidama, paying Adnoc a variable transmission fee for the actual throughput of the pipeline. Adnoc Gas will also be compensated for operating and maintaining Estidama on behalf of Adnoc.
