Abu Dhabi’s Private Department launches an LNG fund targeting USD 1.2 bn, and the UAE’s own LNG still leaves through Hormuz

Owned elsewhere: Abu Dhabi’s Private Department of Sheikh Mohammed bin Khalid Al Nahyan has launched an LNG fund targeting USD 1.2 bn at its initial close, state news agency Wam reports, on top of the USD 1.13 bn it committed to MidOcean in July. Gulf investors now hold LNG supply outside the Gulf, while the UAE’s own LNG still has to leave through Hormuz. The question is whether LNG owned abroad does anything for a Gulf customer when the strait closes.

We know who will run the fund and who it partners with, and not who is paying in or what it will buy. The Pvt Dpt – LNG Fund (CEIC) IC is managed by ADGM-regulated Reem Partners, with the Department’s affiliate KSH Investments as strategic consultant, and is part of the Department’s partnership with EIG and MidOcean. The announcement doesn’t say whether the fund will invest directly or through platforms such as MidOcean, or whether the USD 1.2 bn is on top of the money already committed there.

MidOcean has raised more than USD 4 bn in closed and pending equity commitments over the 12 months to October, double its original target, according to a press release. The money is for LNG assets that earn revenue and projects still under development. Saudi Aramco, which has invested USD 500 mn in MidOcean, is also a shareholder, so Abu Dhabi’s Private Department and Saudi Arabia’s national oil company hold stakes in the same LNG platform.

QatarEnergy shows the producer’s version of the same hedge: Two damaged Ras Laffan trains have put 12.8 mtpa of QatarEnergy’s capacity offline for an expected three to five years, and it has bought 33 US LNG cargoes this year, against four last year, to meet customer commitments. It has also secured up to 4 mtpa from Cheniere’s Sabine Pass and Corpus Christi terminals, with deliveries from 2031.

The UAE has no such supply route of its own: Adnoc has a side exit for its crude and only the front door for its LNG. Its Habshan-Fujairah crude pipeline carries up to 1.8 mn bbl / d to the east coast, while Das Island’s existing 6 mtpa of LNG capacity and the 9.6 mtpa Ruwais LNG project, due to start operations in 2028, are both inside the strait. Adnoc Gas is studying an east-coast LNG export facility, with no final investment decision announced. Oman’s USD 1.6 bn Marsa LNG project at Sohar, outside the strait, is scheduled to start production in 1Q 2028.

The last eight months show what outside supply covered and what it didn’t. LNG loadings from Qatar and the UAE fell by 35 bcm between March and June as the conflict disrupted exports through Hormuz, and higher production elsewhere offset about 27 bcm, or three-quarters of the loss. Asian spot LNG prices still reached USD 29.3/mmBtu in the week to 16 October, nearly three times their pre-war level, Reuters reported.

What’s next: Three answers would settle the question: who subscribes at the fund’s first close, whether any of its supply is meant for UAE buyers, and whether Adnoc Gas takes a final investment decision on its east-coast facility. No date has been announced for any of them.