ADNOC Gas commissions Das Island IGDE-2 project, looks to expand capacity

ADNOC Gas is steaming ahead with projects to expand its production capacity, it said Aug. 6, as parent company Abu Dhabi National Oil Co. simultaneously works to boost its production capacity to 5 million b/d by 2027.

The UAE's state-owned ADNOC currently can produce 4.85 million b/d, though actual production is constrained by its OPEC quota and stands around 3 million b/d, according to the Platts OPEC+ survey. Platts is part of S&P Global Energy.

"The reality is, we have so much more raw gas coming to us, we simply need to invest in more production capacity," ADNOC Gas CFO Peter van Driel said in an Aug. 6 earnings call with reporters. Currently, the company can process 10 Bcf of gas per day, according to its website.

ADNOC Gas made progress on its projects in the first half of 2025, including the Meram project, which looks to maximize ethane recovery to sell to the Borouge 4 petrochemicals project, which is currently under construction at the Ruwais complex in Abu Dhabi and will add 2.2 million mt/year of ethane and 1.2 million mt/year of NGLs, the company said in its first half earnings report posted on the Abu Dhabi stock exchange Aug. 6.

The company's capital expenditure commitments stand at $20 billion for the next four years, and total investments for 2025 are expected to be around $3 billion.

This marks "a substantial increase against the prior year as the Meram project reaches peak activity ahead of startup," the Abu Dhabi National Oil Company subsidiary said in the earnings report.

The Integrated Gas Development Expansion Phase 2 project at Das Island, which brings other types of gas, not including LNG, from offshore to onshore facilities, is also nearing completion, and commissioning is happening currently "to see if everything works perfectly," van Driel said.

ADNOC Gas recently made a $5 billion final investment decision on its Rich Gas Development project, which will expand processing units across four gas facilities. A final investment decision on the second and third phases of the project has not yet been made, but van Driel said a decision on phase two could come at the end of 2025 or early 2026.

Other projects still under consideration for a final investment decision include the Bab Gas Cap project, to expand gas processing capacity by 20% for state-owned subsidiary ADNOC Gas.

Van Driel said a decision would likely not be made before 2030, and the project is "linked to oil and gas field development in the upstream business" and would have a lot of condensate associated with the project.

The impact of the new processing capacity set to come online will begin to show on ADNOC Gas' bottom line in 2026, van Driel said.

As capacity expands, ADNOC Gas also expands domestic and global demand to climb for LNG, naphtha, and LPG. Domestic demand drivers include a growing population, expanding industry, and planned data centers.

Internationally, ADNOC Gas is eyeing Asian LNG markets as countries there switch to cleaner fuels. Even with forecasts of a possible global oversupply of LNG as soon as 2027, ADNOC Gas is undeterred in its capacity expansion plans.

"There will always be periods where there is more demand than supply," van Driel said. "Then new plants come on stream, and you get the reversal, and you often have oversupply, and this is typical for the market."

Additionally, LPG demand remains strong, and while historically there has been a correlation between Brent and LPG prices, that has dissipated, van Driel said.

"I do believe in the coming years, you will continue to see that premium compared to Brent for the LPG market," van Driel added.

ADNOC Gas partially credited high second-quarter revenues to the uncoupling of Brent and LPG prices. Platts assessed Dated Brent at $69.48/b on Aug. 5. The contract price for Saudi propane, which ADNOC Gas uses, is set at $520/mt in August.

ADNOC Gas expects sales volumes in the second half of the year to be between 3.63 TBtu and 3.7 TBtu, an upward revision from the previous projection between 3.56 TBtu and 3.61 TBtu.

However, shutdown activity in the fourth quarter of 2025 will be "higher than normal" and will impact sales, the company said in its earnings report.

ADNOC Gas said domestic gas sales ticked up in the second quarter to 611 TBtu from 580 TBtu in the same period last year, while export and traded liquids dipped slightly to 252 TBtu from 266 TBtu year over year.

Domestic gas revenue jumped to $1.98 billion, contributing to total revenue of $5.96 billion.