By: AGBI

State-backed Abu Dhabi National Oil Company (Adnoc) has approved development of the offshore Umm Shaif Gas Cap project as demand for natural gas grows despite the conflict in the Middle East.

The final investment decision (FID) for the $6.2 billion initiative was taken with partners France’s TotalEnergies, Italy’s Eni and China National Petroleum Corporation, the UAE energy company said in a statement.

The FID includes three engineering, procurement and construction packages worth $5.1 billion, awarded to consortia that include major UAE and international contractors. The consortia were not named.

The project also includes drilling 14 wells by Adnoc Drilling over 18 months using three existing rigs, for $365 million.

The UAE has the seventh-largest gas reserves in the world. Umm Shaif Gas Cap is expected to unlock more than 600 million standard cubic feet per day of natural gas and associated gas liquids, equivalent to 10 percent of the UAE’s current daily gas consumption.

“Adnoc is accelerating its integrated gas strategy to further harness the UAE’s vast gas resources and expand our global LNG platform, as global demand for natural gas continues to rise,” said group CEO Sultan Ahmed Al Jaber.

Production is expected by 2030, the statement said.

The FID builds on Adnoc’s launch this month of a global LNG marketing and trading platform, which is targeting 47 million tonnes per annum of combined marketable LNG capacity by 2035.

In May, Adnoc announced plans to award AED200 billion ($55 billion) in contracts over the next two years to support its upstream and downstream expansion.

The UAE oil giant is also fast-tracking construction of a pipeline that would allow it to double oil exports without using the Strait of Hormuz.

The company already operates a 1.5 million barrels per day pipeline to the east coast, a lifeline for the UAE during the Iran war that began at the end of February.

The renewed conflict has brought the strait — through which a fifth of the world’s oil supplies would typically flow — to a virtual standstill.