Adnoc Gas’ profit halved on Hormuz disruptions — so it’s planning an LNG export route that skips the strait entirely

Disruptions to traffic through the Strait of Hormuz weighed on Adnoc Gas’ 2Q results — and the firm is already planning a way around it. Net income dropped 52% y-o-y in 2Q 2026 to USD 665 mn, while revenues fell to USD 3.6 bn, down 39% y-o-y and 28% q-o-q, according to the company’s management discussion and analysis report (pdf). For 1H 2026, net income fell 34% y-o-y to USD 1.7 bn, with revenues sliding 28% y-o-y to USD 8.6 bn.

The prolonged closure of the strait hit Adnoc Gas where it hurt most, stifling exports of LNG, LPG, and naphtha just as energy prices surged. Exports and liquid sales volumes declined 53% y-o-y in 2Q and 36% in 1H. The volume loss meant Adnoc Gas missed out on surging benchmark prices, with Brent averaging USD 104 / bbl — that’s 30% higher than last year’s 2Q average. Domestic gas sales volumes also dipped 20% in the first half.

Why it matters: This exposes a gap for the UAE's crude bypass strategy — the Adcop pipeline to Fujairah, a new USD 3 bn Ruwais-Jebel Dhanna line, Borouge and AD Ports' east coast buildout, and DP World's 50-year Fujairah concession. All of that infrastructure moves oil around Hormuz. None of it moves gas. Adnoc Gas's entire LNG fleet — 6 mtpa of LNG capacity at Das Island, while the 9.6 mtpa Ruwais LNG project coming online in 2028 — sits inside the strait.

Closing the gap

Adnoc Gas is now studying options for a new LNG export facility on the UAE’s east coast that would give future exports a route to market that bypasses the strait entirely, though a final investment decision has yet to be made, CFO Peter van Driel told Bloomberg. The move comes as the company pushed ahead with USD 8.2 bn of new gas-processing investments to raise production.

The company isn’t slowing capex to get there: Total capex reached USD 2 bn in 1H, up 65% y-o-y, on the back of investment in long-term expansion projects. The company raised its committed 2026-2030 capex target to USD 28 bn, up from USD 20 bn, on the back of final investment decisions (FIDs) for phases 2 and 3 of the Rich Gas Development project. It also recently reached an FID on the USD 6.2 bn Umm Shaif gas cap. However, it maintained its FY 2026 capex guidance at USD 4.5-5 bn, and the board approved a 2Q dividend payout of USD 940 mn, or 4.5 fils per share — on track with its policy to grow annual dividends by 5% through 2030.

What’s next

Assuming the current situation in Hormuz continues, Adnoc Gas expects 3Q 2026 net income to land between USD 600 mn and USD 800 mn. If maritime routes normalize by 4Q, full-year net income is projected to reach USD 3.5-4 bn. On the plus side, operational recovery at Habshan — which was damaged during Iranian attacks on the UAE in April — is moving faster than expected, with gas supply restoration at 85% ahead of schedule.