ADNOC Gas has awarded engineering, procurement, and construction (EPC) contracts worth AED2 billion ($550 million) for the next phase of the UAE’s sales gas pipeline network enhancement project, known as the “ESTIDAMA Project”. In addition, the contracts were awarded to NMDC Energy P.J.S.C and Galfar Engineering & Contracting W.L.L Emirates.
Ownership transfer to ADNOC
Furthermore, the ownership of the ESTIDAMA Project is being transferred from ADNOC Gas to ADNOC, optimizing ADNOC Gas’ capital efficiency. Despite the ownership change, ADNOC Gas will continue to manage the ESTIDAMA Project, leveraging its expertise in construction and pipeline operations, while ADNOC will cover the capital expenditures for this critical infrastructure project.
ADNOC Gas awards engineering, procurement and construction (EPC) contracts worth a combined $550 million (AED2.02 billion) for the next phase of the UAE sales gas pipeline network enhancement ESTIDAMA Project. Approximately 70% of the contracts’ value is expected to flow back… pic.twitter.com/wgaKGTEvXC
— ADNOC Gas (@ADNOCGas) July 15, 2024
Expansion of UAE’s gas pipeline network
Moreover, the ESTIDAMA Project will extend the UAE’s natural gas pipeline network operated by ADNOC Gas from approximately 3,200 kilometres to over 3,500 kilometres, enabling the transportation of higher volumes of natural gas to customers in the Northern Emirates of the UAE.
Boosting UAE’s economy
Approximately 70 percent of the contracts’ value is expected to be reinvested into the UAE economy through ADNOC’s In-Country Value (ICV) program, supporting local economic growth and diversification.
Dr. Ahmed Alebri, chief executive officer of ADNOC Gas, stated that the ESTIDAMA Project award supports the ongoing expansion of the UAE’s gas pipeline network, bringing lower-cost and sustainable natural gas to more locations across the country. He further expressed the company’s pride in playing a leading role in meeting the growing demand for gas across the UAE and enabling the country’s goal of gas self-sufficiency.
Future arrangements
Under the new arrangement, ADNOC Gas will continue to expand its domestic business through ESTIDAMA, receiving a variable transmission fee for the actual throughput of the pipeline. Additionally, ADNOC Gas will be paid to operate and maintain the ESTIDAMA infrastructure on behalf of ADNOC.
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