ADNOC Gas shares surge after $2.5 billion IPO

Published March 13th, 2023 - 09:28 GMT
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ALBAWABA — Shares of United Arab Emirates' ADNOC Gas surged 18.6 percent on Monday in their debut in a $2.5 billion initial public offering that aims to tap into growing global gas demand.


ADNOC Gas rose 24.9 percent on the Abu Dhabi Securities Exchange to hit 2.96 dirhams after opening at 2.37 dirhams and settled at 2.81 dirhams at the end of the trading day.


The ADX’s biggest IPO to date, ADNOC Gas, a subsidiary of the U.A.E.'s Abu Dhabi National Oil Company formed by merging ADNOC’s gas processing and LNG subsidiaries, became operational on January 1 this year.


At more than 50 times oversubscribed, it was the biggest demand ever seen for an IPO in the Middle East and North Africa, even outgunning Saudi Aramco's world-record $29.4 billion listing in 2019.


"With the U.A.E. and Emirate positioned firmly on the global investment map, ADX continues to attract record levels of interest and demand from institutional and international investors. Adnoc Gas’ highly successful IPO is not only testament to the company’s strong growth and value proposition, but also speaks to the strong confidence in the Emirate’s robust market fundamentals and status as a premier investment destination," Hisham Khalid Malak, chairman of ADX, told the Khaleej Times.


The final offer price of 2.37 dirhams set a market capitalization of around $50 billion for the company.


"Demand for the stock was expected to remain strong after listing with the favorable pricing," Monica Malik, chief economist at the Abu Dhabi Commercial Bank, told Agence France-Presse.


The rapidly organized IPO follows last year's scramble for alternative gas resources after Russia's invasion of Ukraine, with gas being touted as cleaner than other fossil fuels as countries around the world search for cleaner fuels to alleviate global warming by striving to reduce their carbon emissions.


"As global efforts to battle climate change gain pace, the role of natural gas in general... is widely expected to grow," Roudi Baroudi, the chief executive officer of the Qatar-based Energy and Environment Holding firm, told Agence France-Presse, adding that liquefied natural gas was "the most important transition fuel" in the move away from more polluting hydrocarbons.


"ADNOC enjoys a solid reputation, so it was to be expected that the ADNOC Gas IPO would attract strong interest," Baroudi added.


ADNOC Gas has access to 95 percent of the U.A.E.'s natural gas reserves, estimated to be the seventh largest globally, supplying over 60 percent of the country’s gas needs while tapping into 10 billion cubic feet per day of gas-processing capacity whilst operating eight gas-processing sites and a pipeline network of more than 3,250 kilometers.


“As ADNOC Gas moves into life as a listed company, we remain focused on our clear growth strategy, underpinned by upstream capacity expansion, which will allow us to process and deliver increased volumes to customers, further enhancement of our product mix and ensuring we deliver for our growing number of international customers as demand for gas continues to increase,” Ahmed Alebri, acting CEO of ADNOC Gas, told The National.



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