The Opportunity

ADNOC Gas is committed to conducting business in a sustainable, socially conscious, and environmentally responsible manner.

Even in the face of the scale and complexity of its operations, the Company remains fully committed to the decarbonisation of its operations and the UAE’s and ADNOC’s sustainability goals.

Through a decarbonisation roadmap, the Company aims to support ADNOC in fulfilling its target of 25% reduction target in greenhouse gas (GHG) emissions intensity by 2030, with a goal of achieving further reductions thereafter to help drive towards ADNOC’s net zero emission ambition by 2050

As the lowest emission hydrocarbon, demand for gas is expected to continue to grow as the world looks to decarbonise energy systems. With this in mind, the Company is taking important steps to reduce emissions intensity and is planning further abatement initiatives.

In 2021, ADNOC Gas group successfully reduced absolute emissions in the business by almost 10%, as compared to the 2018 baseline, through key initiatives such as zero carbon grid power and zero flaring as part of routine operations.

ADNOC Gas believes that its GHG abatement plan has the potential to reduce the Company’s projected GHG emissions by 40% by 2030, compared to the projected 2030 unabated profile.

ADNOC Gas group runs world-class, large-scale processing and liquefaction assets that have a proven track record of operational excellence, consistently delivering exceptional results driven by high plant availability, capacity utilisation and reliability.

ADNOC Gas group maintains its operations’ high reliability through regular and timely maintenance programs and high availability through fully integrated shutdown alignment plans and robust asset management programs across its operations.

ADNOC Gas group’s gas processing plants have historically maintained high reliability and availability levels, averaging around 99.7% and 97.3% respectively, demonstrating the high level of effectiveness of the Company’s operations and maintenance programs.

ADNOC Gas group’s unit processing cost benefits from a range of operational efficiency enhancement projects, including multiple cost optimisation initiatives and the ADNOC Gas group’s approach to technology & innovation.

ADNOC Gas group has introduced a number of digital initiatives to constantly maintain its operational excellence. This includes Tumuh ("Ambition" in Arabic), an integrated platform that uses machine learning and AI to measure flow of molecules, incidents, emissions and flaring. Tumuh is used to proactively manage Health and Safety risk, monitor operational thresholds and send production violations notifications in real time to ADNOC Gas group operations teams.

The combination of a favourable cost structure, rich feedstock and operational excellence enables the ADNOC Gas group to produce an attractive product mix, which in turn has produced Adjusted Revenue of $21.1 billion, Adjusted EBITDA of $7.5 billion and net income of $4.2 billion for the ten months ended 31 October 2022.

ADNOC Gas group has access, through its Gas Supply and Payment Agreement (GSPA) with ADNOC, to the world’s 7^th largest gas reserves, which the Company believes represents one of the lowest-cost upstream resource bases.

Due to ADNOC low-cost production relative to the gas market globally, the ADNOC Gas group’s feedstock is more resilient to commodity price cycles compared to other upstream operations with higher production and development costs, which contributes to the ADNOC gas group’s attractive margins.

The ADNOC Gas group capitalizes on its access to rich feedstock and high liquids extraction capabilities to produce an attractive product mix, with sales gas and ethane sold domestically via stable, long-term offtake contracts, which helps the ADNOC Gas group achieve stable revenues, while a significant share of high-margin natural gas liquids are sold to the international markets with the highest demand, driving profitability.

ADNOC Gas group is well-positioned to benefit from increasing global demand for natural gas, with demand expected to see a 25% increase in the next 25-30 years (Source: Wood Mackenzie).

ADNOC Gas group is advantageously located in a strategically situated corridor with easy access to the largest and growing gas markets, which offers optionality to ship products both to Asia and Europe with sales in the spot market enabling selection of an optimal supply destination.

The increased focus on energy security, across Europe in particular, has led demand for LNG to rise rapidly in recent times and has resulted in strong market fundamentals that support the Company’s growth plans.

ADNOC Gas group’s future growth is underpinned by capacity expansion, which will allow ADNOC Gas group to process larger feedstock volumes and introduce product mix enhancements, producing a higher blended revenue per feedstock unit

The ADNOC Gas executive management team has significant gas processing and LNG experience.

The management team, most of whom have been instrumental in the ADNOC Gas business or within the ADNOC Group, have a combined 196 years of gas industry experience and have worked in management and leadership roles across ADNOC and other major companies in the industry.

The ADNOC Gas group believes that its combination of industry and regional international expertise has enabled it to develop long-standing working relationships with commercial and joint venture partners, regulators and other key stakeholders.

The Company benefits from having ADNOC as its majority shareholder.

ADNOC is both the Company's parent and also a counterparty under several material agreements to the ADNOC Gas business, including the 25-year Gas Supply and Payment Agreement, which provides ADNOC Gas group with reliable access to production from ADNOC’s upstream gas operations in Abu Dhabi.

As the lowest emission hydrocarbon molecule, gas is a key fuel in the energy transition and its criticality for energy security is expected to drive high and growing demand for ADNOC Gas group products around the world.

ADNOC Gas group remains fully committed to the decarbonisation of its operations and the UAE's and ADNOC’s sustainability goals through the implementation of several initiatives such as zero carbon grid power electrification projects and the implementation of carbon capture across sites.

Through its decarbonisation roadmap, the Company is aiming to support ADNOC in fulfilling its 25% reduction target in greenhouse gas (GHG) emissions intensity by 2030 helping drive towards ADNOC’s net zero emission ambition by 2050.

ADNOC Gas group’s GHG abatement plan has the potential to reduce the Company's projected GHG emissions by 40% by 2030, compared to the projected 2030 unabated profile.

A large portion of ADNOC Gas group’s potential GHG reduction is expected to be achieved by way of carbon capture through the deployment of technologies that aim to leverage the UAE's natural geological advantage.

ADNOC Gas group’s operations are fully aligned with the UAE’s ambitions, particularly around net zero, and the broader ADNOC Group, which has a well-developed and robust ESG framework across emissions, the local environment, economic and social contributions, workforce, HSE and overall governance.

ADNOC Gas’ growth strategy relies on upgrading and debottlenecking gas processing capacity and enhancing the growth of liquids recovery and liquefaction capacity, which is expected to result in an increase in the share of high-margin products output.

ADNOC Gas group has several gas processing projects at various stages of development, with potential to deliver over 2.8 bscfd of incremental gas processing capacity and approximately 6 mtpa of additional liquids production capacity (excluding Fujairah LNG) by 2028.