Adnoc Gas Plc is considering a new liquefied natural gas export facility outside the contested Strait of Hormuz. This comes in as Abu Dhabi’s latest move to construct infrastructure bypassing the critical waterway that has been severely disrupted by the Iran war.
The company, a unit of the United Arab Emirates’ biggest oil producer, is weighing options on the country’s east coast. This was revealed by Chief Financial Officer Peter van Driel said in a Bloomberg Television interview. However, it has not made any final decision on the plans.
Supportive Infrastructure
Furthermore, an LNG plant outside Hormuz would add to the UAE’s plans to construct new pipelines and expand ports as the nation attempts to reduce its dependence on the strait to zero. Moreover, the war in the region has exposed Gulf nations’ reliance on Hormuz. This has forced them to come up with alternatives that bypass the waterway in an attempt to keep their energy exports flowing and economies running.
Abu Dhabi National Oil Co. has been especially proactive in moving oil out of the Persian Gulf. The company has been occasionally switching off vessel tracking systems to evade detection. The company’s fleet faces significant risks in the Strait of Hormuz, where three tankers were recently hit by drones and missiles, bringing the total number of attacked vessels to 15 since the onset of the war in Iran.
Middle East Countries Seek Solutions to Bypass Strait of Hormuz Choke Point
In response to the recurring security threats, neighboring nations are winding up alternative infrastructure routes to bypass the volatile choke point.
Saudi Arabia is weighing options to expand export capacity along its East-West pipeline to Red Sea ports. On the other hand, Iraq is developing plans to restore legacy pipelines and construct new routes to ship crude through Syria and Turkey.
Impact of the Proposed ADNOC Gas East Coast LNG Facility
If finalized, the UAE’s strategic LNG proposal would mark a groundbreaking move by a major regional exporter to reroute super-chilled gas shipments away from the Strait of Hormuz. This region is a maritime choke point that neighboring producers like Qatar heavily rely upon. However, establishing an export facility on the UAE’s eastern coast comes with significant financial and logistical challenges, costing billions of dollars and requiring a major cross-country pipeline to transport gas from western fields. Meanwhile, Adnoc Gas is already advancing its infrastructure within the Persian Gulf by constructing an export terminal in Ruwais, a project set to more than double its annual capacity to roughly 15 million tons.
Other LNG Infrastructure by Adnoc
Furthermore, Adnoc Gas is currently expanding its export capacity within the Persian Gulf. The company is building an LNG terminal in Ruwais. This project is expected to bring annual capacity to appeal 15 million tons.
Alongside this development, the company announced an $8.2 billion investment to construct new gas-processing facilities. These are aimed at managing higher output levels driven by surging demand at home and across Asian markets, according to CFO van Driel.
Backed by these capital plans, Adnoc Gas has raised its projected EBITDA growth target by 2030 from 40% to 60%. This positions the company to capture anticipated long-term rises in global fuel demand.
ADNOC Gas East Coast LNG Facility: Project Factsheet
Project Developer: ADNOC Gas Plc (subsidiary of Abu Dhabi National Oil Co.)
Proposed Location: UAE East Coast (Outside the Strait of Hormuz)
Project Status: Preliminary evaluation / Under consideration
Primary Strategic Objective: Bypass the Strait of Hormuz to eliminate maritime supply chain risks and export energy to global markets directly via the Indian Ocean
Estimated Capital Expenditure: Multi-billion dollar
Associated Infrastructure: Cross-country pipeline network connecting western gas fields to the eastern coast
Regional Context & Security Drivers
- Strait of Hormuz Disruptions: Conflict in Iran has severely disrupted shipping along the waterway. Recent incidents include missile and drone strikes targeting tankers, bringing total vessel attacks in the region to 15.
- Operational Adaptations: ADNOC has employed tactical measures, such as deactivating vessel tracking systems, to navigate Persian Gulf risks.
- Regional Strategic Shifts: Neighboring nations are executing similar bypass strategies, including Saudi Arabia’s East-West pipeline expansion to Red Sea ports and Iraq’s pipeline developments via Syria and Turkey.
Project Team
Project Owner / Operator: ADNOC Gas Plc (Subsidiary of Abu Dhabi National Oil Company)
Ruwais LNG EPC Joint Venture Partners: Technip Energies (JV Lead), JGC Corporation, and NMDC Energy
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