UAE’s ADNOC says gas unit share sale can unlock ‘significant value’

ADNOC Group said on Monday that it sees significant value in a further ADNOC Gas share sale after a media report said the UAE energy giant was considering selling an additional 3-5 per cent stake sale in its gas unit.

“ADNOC continuously explores strategic opportunities to drive further growth and prioritise shareholder value, including in ADNOC Gas,” the state energy firm said in a statement.

The company said ADNOC Gas’ value can be enhanced by inclusion in wider market indexes and with a broader shareholder base. The potential share sale could help raise more than $3.5bn, at the top end, based on Friday’s closing price.

However, ADNOC has not made any decisions on a share offering, including the timing or size of such a sale.

The Abu Dhabi-based energy giant raised $2.5bn by listing its gas business in 2023, and its shares have since risen just shy of 50 percent. ADNOC Gas, which has a production capacity of 10 billion cubic feet a day across eight onshore and offshore sites, was created following the merger of ADNOC’s gas processing and LNG operations.

ADNOC divested $935m worth of shares in a secondary offering of its drilling unit in May, a move that analysts said could trigger significant inflows from passive investors.

Earlier in November, ADNOC Gas raised its capital expenditures to $15bn over the next five years from about $13bn earlier, as the company forecasts strong demand for liquefied natural gas through the rest of the decade.

“Over the next five years, we plan to invest $15bn in CAPEX in projects which will enable us to capture opportunities from the forecast increase in domestic and global demand for the lower carbon gases we produce,” said Dr Ahmed Mohamed Alebri, the CEO of ADNOC Gas said at the time.

The energy firm is expanding processing capacity at home by taking control of a coastal LNG plant from its parent company once construction is completed. ADNOC Gas plans to acquire the group’s 60 per cent stake in the Ruwais LNG plant in the second half of 2028 for about $5bn.

ADNOC Gas is managing the construction and design of the Ruwais LNG plant as well as the marketing of the fuel volumes.

The facility, currently under development in Abu Dhabi, is set to be the first LNG export facility in the Middle East and North Africa region to run on clean power. When completed, it is expected to consist of two 4.8 million mtpa LNG liquefaction trains with a total capacity of 9.6 mtpa.

Read: UAE’s ADNOC Gas boosts capex to $15bn on booming LNG market