Adnoc reaches FID on USD 6.2 bn Umm Shaif gas cap

Adnoc reached a final investment decision (FID) on the AED 22.6 bn (USD 6.2 bn) development of the gas cap at Abu Dhabi’s offshore Umm Shaif field, according to a press release. The project is being developed alongside concession partners TotalEnergies, Eni, and China National Petroleum Corporation.

BACKGROUND- Umm Shaif is not a new discovery — it is one of Adnoc’s oldest offshore producing assets and supplied its first oil export back in 1962. The new project will develop its gas cap — the layer of natural gas sitting above the oil accumulation — allowing Adnoc to extract additional value from a field that has already been producing for more than six decades.

Why it matters: Abu Dhabi aims to achieve gas self-sufficiency by the end of the decade to ensure it isn't caught short if flows from Qatar — which currently supplies a third of its needs — come to a halt. Umm Shaif's gas cap — plus the pending Bab project — is the supply side of that plan, while the LNG buildout at Ruwais is the export side.

Plus: The UAE’s exit from Opec in May freed Adnoc from output quotas, so it can now expand production without worrying about capacity it isn’t allowed to use. The project will add more than 600 mmcf / d of gas and associated liquids from 2030 — a meaningful addition against Adnoc's current 11.5 bcf / d of output.

What we know so far: The investment includes three engineering, procurement, and construction contracts worth a combined AED 18.8 bn for offshore infrastructure. It also covers a AED 1.3 bn program to drill 14 wells, with Adnoc Drilling carrying out the work.

Part of a much bigger gas push: The FID follows Abu Dhabi’s award last month of the Bab gas-cap development and production concession to Adnoc and international partners. Adnoc has also launched an LNG marketing and trading platform, targeting 47 mn tons of LNG sales annually by 2035, while Ruwais LNG has been converting heads of agreement into sales and purchase agreements.