ADNOC backs major Umm Shaif gas expansion

ADNOC has approved a $6.2 billion investment to develop the Umm Shaif Gas Cap, advancing Abu Dhabi’s plans to raise natural gas production and expand supplies for domestic and international customers.

The offshore project is expected to produce more than 600 million standard cubic feet per day of natural gas and associated gas liquids by 2030. That volume is equivalent to almost 10 per cent of the UAE’s current daily gas consumption.

The final investment decision was taken with TotalEnergies, Eni and China National Petroleum Corporation, ADNOC’s partners in the Umm Shaif and Nasr offshore concession. ADNOC holds a 60 per cent interest in the concession, while TotalEnergies owns 20 per cent and Eni and CNPC each hold 10 per cent.

The development represents one of ADNOC’s largest commitments to unlocking gas resources located above an established offshore oil reservoir. Umm Shaif is Abu Dhabi’s longest-operating offshore field and has played a central role in the emirate’s energy production for decades.

A gas cap is a layer of natural gas that sits above crude oil within a reservoir. Extracting it requires careful management because changes in reservoir pressure can affect oil recovery. The project will therefore involve complex offshore engineering, drilling and subsurface monitoring designed to protect the field’s wider production performance.

About $5.1 billion of the investment has been allocated to three engineering, procurement and construction packages. The contracts cover large-scale offshore facilities needed to extract, process and transport the additional gas and liquids.

The packages have been awarded to consortia involving UAE-based and international contractors. The spending is expected to support local fabrication yards, engineering companies, equipment suppliers and service providers under ADNOC’s programme to retain a larger share of project expenditure within the national economy.

A separate $365 million drilling programme will cover 14 wells and integrated drilling services. ADNOC Drilling will execute the work over 18 months using three rigs already operating in the company’s fleet, reducing the need to mobilise additional equipment.

Using existing rigs and infrastructure could improve project economics and shorten development schedules. It also reflects ADNOC’s strategy of extracting more value from established fields by applying advanced drilling, reservoir imaging and production-management technologies.

The project strengthens the UAE’s effort to meet rising electricity and industrial demand while reducing dependence on imported pipeline gas. Power generation, petrochemicals, metals production and expanding data-centre capacity are expected to increase domestic consumption through the end of the decade.

Natural gas remains the principal fuel used in the UAE’s electricity system, although nuclear and solar power are taking a growing share of generation. Additional domestic production can release more gas for industrial use and provide greater flexibility during periods of peak power demand.

The Umm Shaif development will also support ADNOC’s expanding liquefied natural gas business. The company is building the 9.6 million-tonne-per-year Ruwais LNG plant in Al Ruwais Industrial City, with commercial operations targeted for 2028.

Ruwais LNG will use electric-powered liquefaction systems designed to lower operational emissions compared with conventional gas-turbine-driven facilities. Once operational, the project is expected to lift ADNOC’s total LNG production capacity to about 15 million tonnes annually.

ADNOC has secured long-term customers for much of the planned Ruwais output, including buyers in Japan, Germany, China and other Asian and European markets. A 15-year agreement signed with Japan’s Inpex covers the supply of one million tonnes of LNG annually.

The company is positioning gas as a central part of its international growth strategy, arguing that the fuel will remain important as economies expand renewable energy while seeking stable electricity supplies. LNG demand is also being supported by industrial growth, coal-to-gas switching and the construction of energy-intensive artificial intelligence and cloud-computing facilities.

Competition among LNG producers is intensifying as Qatar, the United States and other exporters add capacity. ADNOC is seeking to compete through access to low-cost resources, proximity to Asian markets and long-term partnerships with major international energy groups.

Umm Shaif forms part of a wider programme to develop gas resources that were previously considered technically difficult or less commercially attractive. ADNOC is also assessing the larger Bab Gas Cap project, which could add about 1.5 billion cubic feet of daily production if investment and development arrangements are completed.