Abu Dhabi announces a natural gas IPO

After Russia’s horrid invasion of Ukraine, Europe is in need of a new supplier of gas. Of course, the Middle East isn’t planning to waste this opportunity. The Abu Dhabi National Oil Company (Adnoc) aims to raise $2B by selling a 4% stake in its natural gas business in an initial public offering.

Adnoc Gas is one of the biggest gas-processing entities in the world. Hence, it will sell 3B shares on the Abu Dhabi Securities Exchange on Feb 23. The shares should begin trading on March 13.

Adnoc Gas was a result of Adnoc merging its liquefied natural gas and gas-processing businesses to increase the trading and output of liquefied natural gas (LNG). Abu Dhabi sent Germany its first LNG shipment. Europe is switching from Russia to the Middle East for gas.

Abu Dhabi looks to natural gas as a key element in the future energy mix

The city envisions natural gas as a crucial ingredient of the future energy cocktail of renewables and nuclear.

If everything goes as expected and the IPO raises more than $2B, it could be the largest IPO in Abu Dhabi’s history. After the offer, Adnoc will own 91% of the shares. In contrast, Abu Dhabi National Energy Co will own 5%.

The IPO is the newest in a recent surge of major listings across the Gulf region, led by Saudi Arabia and the United Arab Emirates. Both countries rely heavily on high energy prices to take state-owned companies public. Moreover, they raised funds that would help spice up their energy-dependent economies.

As the West tries to distance itself from Russia, the Middle East no longer needs to limit itself to the Asian market. Geopolitics is undergoing a major shift, with Europe looking to untangle itself from Russia for good. Hence, it’s no surprise that Abu Dhabi aims to take the spot.