Abu Dhabi National Oil Company (Adnoc) secured up to USD 11 bn in financing for its Hail and Ghasha offshore gas development, part of the broader Ghasha concession, it said in a press release. The transaction allows it to access capital based on future gas production, giving it funds upfront without exposing its wider balance sheet to project risk.

“It’s the first-ever greenfield gas-based pre-export finance,” Reuters quotes a source it says is close to the transaction as saying. The company says the approach could serve as a model for funding other large-scale greenfield energy projects.

The financing is non-recourse, meaning lenders can claim only the project’s assets if issues arise, protecting Adnoc’s other operations. The structure isolates the midstream processing facilities (where gas, condensates, and natural gas liquids are handled) while allowing Adnoc and its partners to keep operational control and attract funding at favorable terms.

Then there’s the geopolitical maneuver: The financing comes weeks after Lukoil’s US sanction-driven exit from the concession, handing Adnoc its 10% stake, an Adnoc spokesperson told the newswire. This cleared the project — which is being developed in partnership with energy firm Eni and PTT Exploration and Production Public Company — for financing from the region and from Chinese banks.

The transaction brought together more than 20 global and regional banks, including our friends at Mashreq Bank, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Agricultural Bank of China, Bank of China, Citibank, The Development Bank of Singapore, Dubai Islamic Bank, Emirates Development Bank, Emirates NBD, First Abu Dhabi Bank, Gulf Investment Bank, Industrial and Commercial Bank of China, Mizuho Bank, MUFG Bank, Natixis, National Bank of Kuwait, Sharjah Islamic Bank, Sumitomo Mitsui Banking Corporation, Saudi National Bank, and Standard Chartered Bank.

“[This is] probably the largest participation from Chinese banks in a pre-export finance facility in the Middle East ever,” an unnamed source told the newswire. Chinese banks have been loving the Middle East’s energy projects lately, with four Chinese lenders also stepping in for a third of the financing for Saudi Arabia’s Jafurah gas project.

Our take

The predictable nature of Adnoc’s midstream revenues, underpinned by long-term contracts and a credible net-zero strategy, helped the firm secure attractive terms that allow it early access to funding while still retaining full strategic control and reducing balance sheet exposure.

Background on the project

Hail and Ghasha is expected to produce 1.8 bcf/d of gas and is designed to be the first offshore gas project of its kind operating at net-zero emissions. The project will capture 1.5 mn tons of CO2 each year — roughly equivalent to removing more than 300k cars from circulation annually.

The backdrop

The liquidity arrives as Adnoc ramps up spending and overseas expansion. The company has signed off on a USD 150 bn capex plan through 2030, while its international investment arm, XRG, nearly doubled in size to an enterprise value of USD 151 bn and finalized a EUR 14.7 bn takeover of Germany’s Covestro last week.

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