ADNOC Gas PLC posted second-quarter revenue of $6.1 billion, up 13 percent from the same three-month period a year earlier, reflecting stronger domestic demand, the Abu Dhabi National Oil Co. (ADNOC) subsidiary reported on Monday.
A statement on ADNOC Gas’s website said revenues exceeded $6 billion for the third consecutive quarter during the April-June 2024 period, meeting growing gas demand in the UAE, including in the petrochemical sector.
“In the UAE, population growth and industrial growth have contributed to higher revenues in the domestic gas business,” the company said. “ADNOC Gas supplies more than 60 percent of the UAE’s gas needs and is driving the development of the country’s key industries, including the growth of the petrochemicals sector.”
The company said it reported net income, adjusted for one-time or extraordinary items, of $1.2 billion, up 21 percent from the previous year and above market expectations.
EBITDA increased 18 percent year-on-year to $2.1 billion. “The company’s EBITDA margin of 34 percent is underpinned by strong sales demand and the benefits of its long-term gas supply and purchase agreement, as well as ADNOC Gas’s important role in promoting and enabling the UAE’s industrial diversification and growth,” ADNOC Gas said.
The company announced a five percent increase in interim dividends year-on-year to $1.7 billion, with full-year dividends of $3.41 billion to be paid. According to a company announcement on April 1, 2024, ADNOC Gas had announced dividends of $3.25 billion for 2023, which outlined a plan to increase annual dividends by five percent over the next four years.
“We are well positioned to execute on our ambitious growth program, which is underpinned by the strength, expansion and ambition of the UAE market,” said Ahmed Alebri, CEO of ADNOC Gas, commenting on the company’s second quarter performance.
Global expansion
Last month, parent company ADNOC announced that agreements had been signed to award a 40 percent stake in ADNOC’s largest natural gas liquefaction project to BP PLC, Mitsui & Co. Ltd., Shell PLC and TotalEnergies SE.
The companies each signed a 10 percent stake in the liquefied natural gas (LNG) export facility in the industrial city of Al Ruwais, which will have two trains with a total production capacity of 9.6 million tonnes per year (MMtpa), ADNOC said in a press release on July 10, 2024. The state-owned company will retain a 60 percent stake in Ruwais LNG after the contracts are completed.
The plant is scheduled to come online in 2028 and would more than double ADNOC’s LNG production, the company said. Last year, the United Arab Emirates was the third-largest LNG exporter among Middle Eastern countries, exporting a total of 7.7 billion cubic meters (271.9 billion cubic feet), behind Qatar (1st) and Oman (2nd), according to the Energy Institute’s Statistical Review of World Energy.
At the same time as the investment agreements, Shell subsidiary Shell International Trading Middle East Ltd. FZE signed a contract to purchase one million tonnes per year from the project. The Japanese company Mitsui simultaneously committed to purchasing 600,000 tonnes per year. Ruwais LNG had purchase agreements for 70 percent of its production capacity at the time the spin-off was announced.
On June 12, 2024, ADNOC announced the final investment decision and the award of a US$5.5 billion engineering, procurement and construction contract for the project.
Meanwhile, on July 15, 2024, ADNOC Gas announced that it had awarded engineering, procurement and construction contracts totaling $550 million to ESTIDAMA as part of a separate project to expand ADNOC’s domestic distribution network.
ADNOC Gas announced at the time that ownership of the gas pipeline would be transferred to its parent company. After the transfer, ADNOC will cover the investment costs, while ESTIDAMA management will remain with ADNOC Gas.
ESTIDAMA will expand the UAE’s gas pipeline network from around 3,200 kilometers (1,988.4 miles) to over 3,500 kilometers (2,174.8 miles). The project will increase supply volumes to customers in the northern part of the Gulf state.
Last year, ADNOC Gas awarded ESTIDAMA contracts worth $1.34 billion to build new pipelines and a gas compression plant. The compression plant will support increased gas production from the Habshan complex west of Abu Dhabi, according to a press release from co-contractor Petrofac Emirates LLC dated June 30, 2023.
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