LNG

Naturgy Energy, the power company with LNG operations from Puerto Rico to Europe and pipeline gas networks from Algeria to South America, is no longer being targeted for a takeover by a company from Abu Dhabi in the United Arab Emirates.

TAQA, a power and water utility founded in 2005, had been in negotiations to acquire Spain's largest gas company, together with contracts with Algeria and also a long-term contract to import some 2.25 million tonnes per annum Russian LNG.

Under its formal name, Abu Dhabi National Energy Company (TAQA), the UAE company was aiming to acquire the stakes of equity funds that own a large proportion of Naturgy shares.

The UAE company, which is itself listed on Abu Dhabi Securities Exchange (ADX), is an international energy and water operator with a presence in 11 countries.

Boardroom doubts

However, the board of Abu Dhabi's TAQA has decided to withdraw from negotiations that would have launched a joint takeover bid for Naturgy along with Spanish holding company Criteria Caixa

TAQA's decision to drop the joint bid with Spain’s Criteria Caixa was final, according to investment banks involved in the talks.

TAQA had initially said it was also in talks with two private equity firms CVC and GIP, each owning more than 20 percent of Naturgy, to acquire their stakes.

The Abu Dhabi company's talks with Criteria Caixa involved its ownership of a 26.7 percent stake in Naturgy and a possible partnership agreement between TAQA and Criteria Caixa.

Naturgy has a market value of €24.3 billion ($26.Bln), though the transaction was seen by analysts as complicated.

Naturgy posted net income for 2023 of €1.98Bln, which was an increase on the €1.64Bln logged in the previous year.

Gas portfolio

The Spanish company has widespread pipeline natural gas assets in Europe, South America and in North Africa, including the Medgaz Pipeline for natural gas connecting Algerian gas fields to Almeria in southeast Spain.

Naturgy holds a 49 percent stake in Medgaz while Algeria’s state oil and gas company Sonatrach owns 51 percent.

Other Naturgy divisions include thermal generation in Spain and with nuclear and gas-fired power.

Naturgy’s operations additionally include gas and power assets in Mexico, Panama and Argentina where demand has been increasing, as well as in the Dominican Republic and in the US Caribbean territory of Puerto Rico.

Naturgy Energy, the power company with LNG operations from Puerto Rico to Europe and pipeline gas networks from Algeria to South America, has seen its shares jump by more than 6 percent amid moves for a takeover by a company from Abu Dhabi in the United Arab Emirates.

ADNOC Gas, the recently spun-off subsidiary of Abu Dhabi National Oil Co (ADNOC), has signed its first big deal since the floatation in the form of a three-year LNG supply agreement with French major TotalEnergies.

Following an initial public offering completed in March 2023, ADNOC Gas is now listed on the Abu Dhabi Securities Exchange as a separate company and is responsible for running Abu Dhabi’s world-scale LNG, natural gas processing and gas marketing operations in the United Arab Emirates.

The ADNOC Gas liquefaction plant on Das Island in the Arabian Gulf currently has export capacity of 6 million tonnes per annum and TotalEnergies is already a customer.

A statement said that the ADNOC Gas supply deal with TotalEnergies was with the French company’s Gas and Power unit and was for a period of three years, though the volumes involved were not immediately disclosed.

“Our new LNG supply agreement with TotalEnergies represents another significant milestone in our strategy to expand our global reach and strengthen our position,” said Ahmed Mohamed Alebri, Chief Executive of ADNOC Gas.

Commitment

“This agreement reflects our commitment to meeting the needs of our customers by offering supply security, price competitiveness,and flexibility,” Alberi added.

TotalEnergies has a long-standing presence in the UAE, having operated in the country for more than 80 years.

“We are pleased to have signed this three-year contract with our long-standing strategic partner,” said Thomas Maurisse, Senior Vice President LNG at TotalEnergies.

“These additional volumes will strengthen our global LNG portfolio and our ability to supply the growing Asian markets,” Maurisse added.

The three-year contract is expected to commence in 2023 and will run through 2025.

The ADNOC Gas IPO followed the sale of 5 percent of its shares for around $2.5 billion and the company is now listed on the Abu Dhabi Securities Exchange.

In addition to operating the Das Island LNG plant ADNOC Gas now independently runs eight processing sites, both onshore and offshore, and has a pipeline network of over 3,250 kilometres (2,020 miles) in length in the region.

Existing joint venture partners in the company’s LNG plant include Japan’s Mitsui & Co and UK major BP, as well as TotalEnergies.

TotalEnergies is also a gas-processing partner of ADNOC Gas and Shell and Thailand’s PTT Exploration and Production have similar joint venture partnerships with the company.

Abu Dhabi National Oil Company (ADNOC) is proceeding with its plans to offer a minority stake in new subsidiary ADNOC Gas, which consolidates the emirate’s gas processing and LNG operations, through an initial public offering on the Abu Dhabi Securities Exchange in 2023.

Abu Dhabi National Oil Company (Adnoc) has invited investment banks to pitch for roles in the initial public offering (IPO) of its natural gas business during the first half of 2023.

Several investment banks have been asked for proposals to act as joint global coordinators and bookrunners in the IPO to join New York-based Goldman Sachs as part of a planned banking syndicate, according to bankers familiar with the plans.

Adnoc is combining its gas-processing subsidiary with its main gas export unit, Adnoc LNG, into a single listed entity and has engaged Goldman Sachs as the principal bank to oversee the various transactions.

Adnoc plans to offer investors a minority stake in the new company through an IPO on the Abu Dhabi Securities Exchange in 2023.

Adnoc LNG was the first production company in the Arabian Gulf and processes feed gas at Das Island, located 160 kilometres (100 miles) off the coast of Abu Dhabi.

The LNG company also supplies one billion standard cubic feet of gas per day to the United Arab Emirates national grid, contributing to Adnoc’s commitment towards gas self-sufficiency in the UAE.

Current stakes

Adnoc LNG is majority owned by the Abu Dhabi-based firm with a 70 percent share of the company. The other shareholders are Japan’s Mitsui & Co with 15 percent, UK major BP with 10 percent and TotalEnergies with 5 percent.

Adnoc said late last month that the consolidation of the two entities would create one of the world’s largest gas-processing companies with a processing capacity of around 10 billion standard cubic feet per day.

Analysts note that Adnoc in the UAE and other nations in the region such as Qatar are overhauling their corporate capabilities to replace all Russian energy imports as early as mid-2024 as Western sanctions were imposed over the Russia's invasion of Ukraine.

The UAE is comprised of seven emirates and the leading energy emirate is Abu Dhabi, which also has the Ghasha mega-project, the world’s largest offshore sour-gas development. 

The emirates, outside of Abu Dhabi, have varying degrees of more limited energy resources in Dubai, Sharjah, Ajman, Umm Al-Quwain, Fujairah and Ras Al Khaimah,

The multi-billion-dollar Ghasha project will play a vital role in meeting the UAE’s gas self-sufficiency objectives.

Adnoc says that the Ghasha mega-project draws on its long-standing sour-gas expertise, including its Shah onshore ultra-sour gas field project, its pioneering work in the creation of artificial islands and the wide and deep sour-gas capabilities of its concession partners.

Adnoc is also currently unlocking potential unconventional gas resources as part of its integrated gas strategy and since late 2019 it has announced the discovery of 160 trillion standard cubic feet of recoverable unconventional gas.