ADNOC Gas eyes new LNG export plant to bypass Strait of Hormuz
Abu Dhabi’s national oil company is considering building a new liquified natural gas export facility outside the Strait of Hormuz and is committing to $8.2 billion in investments to boost gas production to meet booming demand.
ADNOC Gas is looking at options on the UAE’s east-coast, where the emirate of Fujairah borders the Gulf of Oman, but has not made any final decision on the plans, Chief Financial Officer Peter van Driel told Bloomberg.
The UAE is on a mission to eventually reduce its dependence on the Strait to zero by building new oil pipelines to Fujairah and expanding internal freight networks via road and rail.
Such a facility would give the UAE a competitive advantage against its neighbors, particularly Qatar — a major gas producer — which is largely dependent on the route.
ADNOC ships have been repeatedly attacked while transiting the Strait, with a missile strike on one of its tankers on Saturday morning bringing the total number of attacks on the company’s vessels to 16. No injuries were reported in the latest incident.
Separately, ADNOC Gas will build new gas-processing facilities to handle increased volumes amid fast-growing demand both domestically and from Asia, van Driel said. It comes months after the UAE exited OPEC, freeing it from quota restrictions.
ADNOC spends $1.3B to expand tanker fleet
Abu Dhabi’s national oil company ADNOC is spending $1.3 billion to bolster its fleet of tankers as it continues to ramp up Gulf exports despite threats to shipping in the Strait of Hormuz.
ADNOC Logistics & Services bought six very large crude carriers, almost doubling its current fleet of eight, as well as five very large gas carriers.
ADNOC has been using tactics including shipping under darkness with transponders switched off and military escorts to shuttle crude and other refined products out of the Gulf.
Using its own vessels gives the company greater freedom to make these riskier voyages, as it takes a more assertive and expansive stance following its departure from OPEC.
The UAE has also been increasing oil shipments from the eastern emirate of Fujairah, which sits outside the Strait, via a cross-country pipeline. ADNOC L&S will take delivery of the vessels this quarter.
UAE boosting use of AI in physical world, Dr. Sultan Al Jaber says
Dr. Sultan Al Jaber, the UAE’s Minister of Industry and Advanced Technology, and its top oil executive told a Washington audience that the country is moving to a new stage of artificial intelligence, using the technology to run business operations and develop its infrastructure.
“In the first phase AI helped generate content. It helped analyze information and automate workflows,” Dr. Al Jaber said Wednesday in a webcast interview with the Atlantic Council. “In the next phase, AI is helping us operate physical systems through robotics, autonomous inspections, intelligent infrastructure, and real-time operational optimization,” he said.
Dr. Al Jaber, who is Group CEO of the UAE’s ADNOC national oil company, linked AI directly to energy production and said the firm is deploying thousands of agentic AI and robotic applications. “The AI race is an electron race, and countries that can provide reliable, scalable, and affordable power will have a major competitive edge and a major strategic advantage,” he said, speaking from his office in Abu Dhabi.
The UAE has emerged as one of the world’s most aggressive state-backed AI investors through firms such as G42 and MGX. UAE funds have invested in OpenAI, xAI and Anthropic, while G42 teamed up with Nvidia on the massive Stargate data center project in Abu Dhabi.
The Emirati cabinet minister said government funds will continue to put money into U.S. companies despite disruptions from the Iran war and volatility in global oil markets.
“We invest in America because we believe in America,” Dr. Al Jaber said. “We believe in its energy resources, its capital markets, its innovation ecosystem, and its people and the quality of the ecosystem that has been created that helps attract investments.”
The minister’s remarks at the Atlantic Council event come as the UAE tries to protect its oil exports from disruptions tied to the Iran war after shipping through the Strait of Hormuz was severely affected and facilities linked to ADNOC were targeted during the conflict.
The UAE, one of the world’s largest oil exporters, formally announced on April 28 that it would withdraw from OPEC, with the decision taking effect on May 1. Officials argued that OPEC production quotas were limiting Abu Dhabi’s ability to expand output despite billions of dollars in investment in new oil capacity.
ADNOC tanker tracked getting past Strait of Hormuz blockade
The first LNG cargo to exit the Gulf since the Iran war began appears to have been shipped by ADNOC, putting the Abu Dhabi national oil company at the center of efforts to test whether energy flows through the Strait of Hormuz can resume.
Ship-tracking data show the Mubaraz loaded at ADNOC’s Das Island terminal and has now moved beyond the Gulf, marking the first confirmed LNG transit since late February after weeks of near-total paralysis, Bloomberg reports.
ADNOC declined to comment on the specific shipment. “This is a developing situation and ADNOC continues to monitor developments closely while prioritizing the safety and security of its operations, people and assets,” the company said in a statement.
The massive tanker, which is managed by Adnoc Logistics & Services and was last seen in the Gulf on March 30, has shown up off the west coast of India, suggesting it crossed the Strait of Hormuz after several weeks without signal.
Meanwhile, a $500 million superyacht linked to sanctioned Russian billionaire Alexey Mordashov crossed the Strait of Hormuz over the weekend from Dubai to Oman, raising questions about how it secured clearance, Reuters reports.
XRG consortium’s $19 billion bid for Australia’s Santos fails
XRG, the lower-carbon global investment arm of Abu Dhabi’s national oil company ADNOC, has walked away from a $19 billion takeover bid for Australian energy company Santos after the parties failed to agree on key terms.
Santos shares fell 12% on Thursday in trading on Sydney’s ASX, wiping some $2 billion off its market value.
A consortium led by XRG and including Abu Dhabi sovereign wealth fund ADQ and private equity firm Carlyle made the play for Australia’s second-largest gas producer in June.
While the deal promised to be the largest all-cash buyout in Australian history, analysts expressed doubts over whether the sale would materialize after a lukewarm reception from shareholders and uncertainty over whether it would win regulatory approval.
Santos, a perennial takeover target still smarting from failed talks with domestic rival Woodside Energy last year, has stakes in prized gas assets in Papua New Guinea as well as its major Australian LNG projects.
The failed deal and three months of lost time is also a setback for XRG, which is rapidly scaling up global operations and has set an ambitious goal to build a gas and LNG business with capacity of 20-25 million metric tons a year by 2035.
The company, which was launched late last year with an enterprise value of more than $80 billion, is also facing headwinds in Europe, where its $17 billion acquisition of German chemicals firm Covestro is under review by the European Commission.
ADNOC dealmaking goes straight to top amid Covestro negotiations
The decision by the UAE’s national oil company ADNOC to move from operating simply as a domestic oil producer to taking the reins as an international dealmaker comes straight from the top – and progress this week on a $12.5 billion takeover of German chemicals giant Covestro may burnish its reputation.
UAE President Sheikh Mohamed bin Zayed chaired a 2022 board meeting where he approved a $150 billion five-year capital spending plan to transition the company from a traditional state oil firm into a diversified, multinational energy company.
When the Covestro deal appeared to stall in recent months, ADNOC raised its bid after seeking approval from MBZ, Bloomberg reports. The negotiations took place against a backdrop of accelerating deal activity at ADNOC and its alternative energy company, Masdar, in which it owns a 33% stake.
Now Masdar finds itself in a bidding war to acquire Spanish renewables firm Saeta Yield from Brookfield. In the past year it has bought a renewable energy company in Greece and announced a deal to purchase a 50% stake in Terra-Gen, one of the largest private renewable energy producers in the U.S.
The ink dries on these agreements as ADNOC is boosting production capacity and Masdar is looking to develop or acquire an energy portfolio of at least 100 GW capacity by 2030.
