Adnoc has initiated a bid process for a new 4 million tonnes per annum (mtpa) liquefied natural gas (LNG) export facility in Fujairah, on the Gulf of Oman, to bypass potential disruptions in the Strait of Hormuz. This follows a forced production cut at its Das Island facility in March 2024 due to Middle East conflict-related closures of the strait, through which over 20% of global oil and LNG typically passes.

Project Scope and Status

The project, named the East Coast LNG facility, is in the design competition phase, with bids due within days. Adnoc is expected to select two to three contractors for the design phase, who will later participate in the engineering, procurement, and construction (EPC) phase. The workscope likely includes liquefaction facilities, a new gas pipeline linking Abu Dhabi's onshore Habshan field to the Fujairah terminal, and a new gas compressor at Habshan. Building the greenfield facility could cost upwards of $5 billion, though precise figures are premature.

Strategic Context and Existing Facilities

Adnoc currently operates the 6 mtpa Das Island LNG terminal, 160 km offshore in the Persian Gulf, which requires transit through the Strait of Hormuz. It is also building the 9.6 mtpa onshore Ruwais LNG facility, 240 km west of Abu Dhabi on the Persian Gulf coast, which also relies on strait access. The Ruwais project, with a final investment decision in June 2024 and an EPC contract valued over $5.5 billion awarded to a Technip Energies, JGC Corporation, and NMDC Energy joint venture, will consist of two 4.8 mtpa trains, more than doubling Adnoc's existing UAE LNG capacity to around 15 mtpa. Equity partners in Ruwais include Mitsui & Co, Shell, BP, and TotalEnergies, each holding a 10% stake, with Adnoc expected to transfer its 60% share to Adnoc Gas for an estimated $5 billion in the second half of 2028.

Future Implications

Industry sources suggest Adnoc may follow a similar route for the Fujairah facility, eventually transferring it to Adnoc Gas after completion. Once approved, the new terminal is likely to further boost the UAE's long-term gas export capabilities, providing an alternative export route that avoids the Strait of Hormuz.