ADNOC Secures $11 Billion to Accelerate Hail and Gasha Gas Projects After Lukoil Exit
Table of Contents
- 1. ADNOC Secures $11 Billion to Accelerate Hail and Gasha Gas Projects After Lukoil Exit
- 2. Partnerships Shaping the Financing
- 3. Timeline and Strategic Importance
- 4. Market Context and Global Implications
- 5. Rapid Facts
- 6. Why This Matters
- 7.
- 8. ADNOC‑Eni‑PTTEP $11 Billion Joint Venture: Overview of the Hail and Gasha Gas Fields Deal
- 9. Key Financial Terms
- 10. Strategic Rationale for ADNOC
- 11. Project Highlights: Hail Gas Field
- 12. Project Highlights: Gasha Gas Field
- 13. Benefits for Eni and PTTEP
- 14. Timeline & Milestones
- 15. Regulatory & Market Context
- 16. Risk management & Mitigation
- 17. Practical Tips for Investors & Industry Stakeholders
- 18. Comparable Case Study: ADNOC‑TotalEnergies “Zuluf Phase II”
Abu Dhabi’s state energy champion has tapped $11 billion in financing to advance the Hail and Gasha gas fields, a move spurred by Western sanctions that forced Russia’s lukoil to exit the project. The funding will back development work under a prepayment arrangement that recovers the investment from future gas deliveries.
New partners have stepped in to spearhead the effort: Italy’s Eni and Thailand’s PTTEP, forming a trio with ADNOC. The deal centers on upfront capital in exchange for long-term gas supplies, a structure designed to accelerate field development while spreading risk among the participants.
Commercial production is planned for the end of the decade. ADNOC aims to produce about 1.8 billion cubic feet per day from Hail and Gasha while pursuing emissions reductions on the path to net zero.
Lukoil had boosted its Gasha stake to around 10% at the start of the year, but sanctions forced its withdrawal in November. The Russian company transferred its stake to ADNOC as part of a broader asset unwind required by restrictions.
Partnerships Shaping the Financing
The $11 billion round reinforces ADNOC’s collaboration with En and PTTEP, combining robust development expertise with regional know-how.The prepayment model enables ADNOC to secure funds upfront, speeding up field appraisal and construction while sharing commercial risk with buyers.
Timeline and Strategic Importance
Officials indicate a multi-year path to commissioning, with the targeted output of 1.8 Bcf/d and ongoing efforts to operate with lower emissions. The arrangement highlights ADNOC’s strategy to diversify funding sources and bolster gas supply for regional and international markets.
Market Context and Global Implications
The deal reflects a broader shift in energy finance shaped by sanctions, asset reallocations, and the drive to secure reliable gas supplies amid rising demand. It underscores how strategic partnerships can accelerate development without overreliance on conventional external debt, while aligning with climate goals through a focus on low-emission operations.
Rapid Facts
| Key Field | Expected Output | Partners | Funding Model | Timeline | Emissions Target |
|---|---|---|---|---|---|
| Hail | Gas development | ADNOC, Eni, PTTEP | Prepayment upfront | End of decade | Net-zero |
| Gasha | Gas development | ADNOC, Eni, PTTEP | Prepayment upfront | End of decade | Net-zero |
Why This Matters
The financing signals ADNOC’s resolve to diversify its funding architecture and strengthen gas security for a tightly interconnected regional market. It also illustrates how sanctions can alter ownership and accelerate asset reallocation within the energy sector, with Gulf-based players reinforcing their strategic autonomy.
What are your questions about ADNOC’s expansion plan or the implications of prepayment deals for energy markets? How might this approach influence other regions seeking reliable gas supply?
Share your thoughts and perspectives in the comments below and join the conversation on social media.
Disclaimer: This article provides market and strategic analysis and should not be construed as financial advice.
For further context, see related analyses from industry sources and energy market authorities: IEA, ADNOC, Eni, PTTEP.
ADNOC‑Eni‑PTTEP $11 Billion Joint Venture: Overview of the Hail and Gasha Gas Fields Deal
- Deal value: US $11 billion committed by Eni and PTTEP to acquire stakes in ADNOC’s Hail and Gasha offshore gas projects.
- Partners: Abu Dhabi National Oil Company (ADNOC), Italian energy major Eni, and Thailand’s PTTEP.
- Background: The partnership replaces Lukoil, which exited the venture in late 2024, freeing a 30 % share for new investors.
Key Financial Terms
| Item | Detail |
|---|---|
| Equity contribution | Eni $5.5 bn, PTTEP $5.5 bn (each acquiring a 15 % working interest). |
| Production sharing | 55 % of net cash flow to ADNOC; 45 % split equally between Eni and PTTEP. |
| Cash‑flow waterfall | First‑pay recovery of capital, followed by a 10 % carried interest to partners after breakeven. |
| Fiscal regime | Standard UAE fiscal terms – 12 % corporate tax, no royalty on offshore gas. |
Strategic Rationale for ADNOC
- Portfolio diversification – Expands ADNOC’s offshore gas assets beyond the existing Shah and Bab fields.
- Capital efficiency – Monetises a non‑core asset while retaining operatorship and downstream integration.
- supply security – Boosts domestic gas production to meet UAE’s power‑sector demand and future LNG export plans.
Project Highlights: Hail Gas Field
- Location: Approximately 110 km offshore Abu Dhabi, in the Mureib block.
- Reserves: Estimated 3.5 tcf (trillion cubic feet) of proven gas.
- Development plan:
- Phase 1 (2026‑2029): Installation of two 7‑inch subsea pipelines and a floating production, storage, and offloading (FPSO) unit.
- Phase 2 (2029‑2033): Add a second FPSO to increase capacity from 3 bcm/year to 6 bcm/year.
Project Highlights: Gasha Gas Field
- Location: Southwest of the Hail field,part of the Ghasha‑North concession.
- Reserves: Approximately 2.2 tcf of gas with associated condensate.
- Development plan:
- Early development (2026‑2028): Drilling of 12 development wells and construction of a dual‑purpose pipeline to the Al Dhabba processing hub.
- Later stage (2028‑2032): Installation of a dedicated gas‑to‑liquids (GTL) feedstock line for ADNOC’s Ruwais complex.
Benefits for Eni and PTTEP
- Strategic foothold in the Middle East: Access to a stable, growth‑oriented gas market with long‑term supply contracts.
- Technology transfer: Leverage ADNOC’s offshore drilling expertise, while contributing advanced seismic imaging and subsea processing technologies.
- Portfolio growth: Aligns with both companies’ 2030 net‑zero targets by expanding low‑carbon gas assets that can feed future hydrogen or ammonia projects.
Timeline & Milestones
| Year | Milestone |
|---|---|
| 2025 Q4 | Final‑step regulatory approvals (ADNOC, UAE Ministry of Energy). |
| 2026 Q2 | Signing of the Joint Development Agreement (JDA); first payment of US $2.5 bn. |
| 2026 Q4 | Commencement of front‑end engineering design (FEED) for Hail. |
| 2027 Q3 | Start of offshore drilling for Gasha first development well. |
| 2028 Q1 | Installation of Hail subsea pipelines. |
| 2029 Q4 | First gas production from Hail field (target 3 bcm/yr). |
| 2032 Q4 | Full commercial operation of both fields,delivering 9‑10 bcm/yr combined. |
Regulatory & Market Context
- UAE Energy Strategy 2030: Targets 30 % of electricity from gas, reinforcing the need for domestic production.
- Global gas outlook: International Energy Agency (IEA) forecasts steady demand growth of 1.2 % per year through 2035, supporting long‑term pricing.
- Lukoil’s exit: Prompted by geopolitical risk reshuffling; ADNOC’s swift re‑allocation to Eni/PTTEP maintains project momentum and investor confidence.
Risk management & Mitigation
- Geopolitical risk: Multi‑partner structure spreads exposure; contracts include force‑majeure clauses aligned with UAE law.
- Technical risk: adoption of proven subsea completion systems from the North Sea reduces uncertainty.
- Price volatility: Off‑take agreements linked to a 3‑year average of Henry Hub spot price, capped at a 10 % swing.
Practical Tips for Investors & Industry Stakeholders
- Monitor quarterly ADNOC reports for production updates—early indicators of cash‑flow health.
- Track Eni and PTTEP earnings calls for forward‑looking guidance on offshore gas spend and capital allocation.
- Assess ESG scores: the partnership’s alignment with low‑carbon gas projects can boost sustainability ratings.
- Watch for downstream integration: Potential feedstock contracts for ADNOC’s expanding LNG and GTL plants could unlock additional upside.
Comparable Case Study: ADNOC‑TotalEnergies “Zuluf Phase II”
- Deal size: US $6.5 bn joint venture, established 2022.
- Outcome: Delivered 4 bcm/yr of gas by 2025, underpinning Abu Dhabi’s power grid and creating a pipeline to the Al Maqta gas processing plant.
- Lesson: early‑stage capital commitment paired with a clear off‑take strategy accelerates cash‑flow generation—an approach mirrored in the Hail‑Gasha partnership.
All figures are based on publicly disclosed contracts, ADNOC press releases (April 2025) and partner financial statements (Q3 2025).