ADNOC strikes natural gas delivery deals with two UAE industrial firms

By Amirtha P S, Desk Reporter
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UAE’s state-owned oil company, Abu Dhabi National Oil Company (ADNOC) has signed long-term gas sales agreements with two industrial companies, Emirates Steel, the UAE’s largest steel producer and Arkan, a construction and building materials company.

Under the terms of the agreements, ADNOC will supply natural gas to Emirates Steel and Arkan for the next 10 years to support the growing energy demand and feedstock of Abu Dhabi’s industrial sector

Khalid Salmeen
Khalid Salmeen
Executive Director
Downstream Industry
Marketing & Trading Directorate

“These important agreements strengthen ADNOC’s relationship with both companies as we continue to provide stable and reliable energy supplies to power Abu Dhabi’s industrial sector, enabling industry to thrive and ‘Make it in the Emirates’. ADNOC remains committed to delivering a more sustainable and economic gas supply and enabling gas self-sufficiency for the UAE in line with the wise directives of our leadership.” 

ADNOC, which produces and sells oil on behalf of the UAE, Opec’s third-largest producer, has been looking to develop its gas resources. Natural gas is an important feedstock for the industrial sector as it serves as a primary energy source for many industrial processes.

The national oil company has the potential to produce 11 billion cubic feet of natural gas per day and over 1 billion cubic feet per day of sour gas. A significant proportion of gas fields in Abu Dhabi are sour, a term that refers to the presence of sulfurous compounds in the gas. ADNOC currently supplies over two-thirds of the UAE’s industrial sector’s power needs.

“This agreement will ensure the security of supply and cost of natural gas to our plants, and demonstrates Adnoc’s continued support of the UAE’s industrial sector,” said Emirates Steel chief executive Saeed Al Remeithi.

ADNOC is planning to spend $122 billion over the next five years in developing its upstream hydrocarbon assets. Of this planned investment, $43.5 billion will be directed towards the local economy.

The company is also looking to create synergies with its natural gas production and Abu Dhabi’s plans to increase blue hydrogen production. Earlier this week, ADNOC announced the development of a massive blue ammonia project in its downstream center in Ruwais as it looks to increase the country’s hydrogen economy.

Earlier this month, Abu Dhabi’s General Holding Corporation, Senaat, which owns both Emirates Steel and Arkan, announced a proposal to merge the companies to create an industrial business with combined assets of $3.54 billion.

Related: ADNOC awards $744mn worth contract to NPCC for offshore field development