ADNOC approves $6.2bn Umm Shaif gas expansion
The offshore project is expected to add more than 600mn cubic feet a day of gas output by 2030 as the UAE builds its LNG position.
By Marcus V. Thorne · Markets Editor
· 3 min read
Abu Dhabi National Oil Company has approved a $6.2bn development at the Umm Shaif offshore field, targeting more than 600mn standard cubic feet a day of additional natural gas and associated liquids by 2030. ADNOC said the project would support the United Arab Emirates’ domestic energy supply and its plan to expand liquefied natural gas exports at a time of heightened concern over Gulf shipping routes.
The company is developing the Umm Shaif Gas Cap with TotalEnergies, Eni and China National Petroleum Corporation. Umm Shaif is Abu Dhabi’s longest-running offshore field and has been part of the emirate’s oil and gas industry for more than six decades.
ADNOC said the expected production increase would be equal to almost 10% of current daily gas consumption in the UAE. Gas from the project would add to feedstock available for local power and industry, while associated gas liquids can be separated and marketed as higher-value hydrocarbon products.
Natural gas becomes LNG when it is processed and chilled into liquid form, reducing its volume so it can be moved by tanker to customers that are not connected by pipeline. For Abu Dhabi, additional upstream gas output is a prerequisite for raising LNG production, trading and export capacity.
Gas strategy tied to LNG ambitions
ADNOC chief executive Sultan Ahmed Al Jaber said in a company statement that the group was “accelerating its integrated gas strategy” to use the UAE’s gas resources and expand its global LNG platform as demand rises.
The UAE holds the world’s seventh-largest proven gas reserves, according to the report, alongside oil production of more than 4mn barrels a day. Abu Dhabi is aiming to lift oil production above 5mn barrels a day by next year, after the UAE left OPEC earlier this year and no longer faces the group’s output limits, CNBC reported.
ADNOC has set a target of 47mn metric tons a year of LNG capacity by 2035 as it expands production, trading and export operations. The Umm Shaif investment forms part of that wider effort to turn domestic gas resources into a larger role in international gas markets.
Supply security in focus
The project has gained prominence as conflict in the Middle East disrupts energy markets and draws attention to the Strait of Hormuz, a key corridor for LNG shipments. CNBC reported that the waterway is normally used for about 20% of global LNG trade and has remained effectively closed, with particular implications for producers including Qatar.
The UAE also has a domestic reason to increase its own gas supply. CNBC reported that roughly one-third of the country’s gas demand is met through a pipeline arrangement with Doha that is due to expire in 2032.
Umm Shaif has historical significance for Abu Dhabi’s energy sector. The field hosted the emirate’s first offshore well and supplied crude for Abu Dhabi’s first oil exports in 1962, according to ADNOC.
This story draws on original reporting from CNBC.
