UAE's gas driven future is emerging and ADNOC must deliver

Demand for gas at home and oil internationally: that is the key theme of Adnoc’s latest bumper budget. Its board meeting last week approved $150 billion of capital expenditure over the next five years. Does the state oil company's latest budget and resource base set it up to meet its mission?

The most critical issue is to assure domestic energy security, predominantly by providing natural gas. The country wants to be capable of self-sufficiency by 2030. While nuclear and solar power have greatly diversified power generation, domestic demand is rising again.

People are flocking to the country, attracted by strong economic growth and attractive lifestyles, or escaping financial and political malaise elsewhere. New gas-based industries are being established, to support a wider manufacturing base. Artificial intelligence, such the 5 gigawatt “Stargate” computing project, is hungry for electricity. And the new liquefied natural gas export plant at Ruwais will need about 1.3 billion cubic feet of gas input daily when it starts up in late 2028.

Adnoc’s gas subsidiary expects UAE consumption to rise at 4-5 per cent per year up to 2030. Timing of its gas megaprojects is critical to stay in sync with demand.

Adnoc unveils $150bn expansion drive as UAE boosts oil and gas reserves 01:46

The biggest single production increment will come from the giant Ghasha offshore development, which has now been expanded to 1.8 billion cubic feet per day from 1.5 Bcfd, due fully on-stream by 2028. But these are technically-complex and challenging projects, demanding strict cost control.

On the oil side, Adnoc plans to raise crude oil production capacity to 5 million barrels per day by 2027, a target it has already almost achieved. It has managed to stick to its plans so far despite pervasive uncertainty. The UAE is allowed to produce 3.4 million bpd next month and the first quarter of next year.

Oil prices have slipped prett