ADNOC Gas Q3 Net Income Doubles to $1.34 Billion, Guidance Raised to $4 Billion Minimum as Hormuz Bypass Options Stay Open

Since the Iran war began disrupting shipping through the Strait of Hormuz, Gulf energy producers have been forced to rethink how their product reaches the world. ADNOC Gas's third-quarter results, released today, Nov. 10, show what that looks like on a balance sheet: a strong rebound from a weak spring, but not a full recovery.

The numbers

Net income for the quarter to Sept. 30 came to $1.34 billion, up 101% from $665 million in the second quarter, the company said in a statement to the Abu Dhabi Securities Exchange. Against the same quarter last year, profit was roughly flat.

EBITDA rose 70% from the prior quarter to $2.03 billion. Revenue was $4.38 billion, down nearly 10% year-on-year.

The quarter-on-quarter gains were uneven across the business, according to the company:

• Domestic sales within the UAE rose 20%, and domestic gas EBITDA rose 28%.
• EBITDA from international product sales rose 106%.
• Sulfur EBITDA rose 249%.

Domestic gas sales volumes fell 19% from a year earlier to 513 trillion British thermal units. The company attributed that to reduced reinjection gas and ethane offtake. Sales gas volumes were broadly flat.

The board approved a quarterly dividend of $940 million, up 5% from a year ago and payable in December. That matches the company's stated target of raising the dividend 5% a year through 2030.

Full-year net income guidance now stands at "at least $4 billion." The prior range was $3.5 billion to $4 billion.

Hormuz still sets the ceiling

The company was blunt about what is holding it back. "Ongoing disruption to maritime movements through the Strait of Hormuz continued to create a challenging operating environment," it said. The disruption continued to curtail exports of liquefied petroleum gas, naphtha and LNG, which limited the company's ability to capture higher global energy prices.

The guidance comes with a caveat from ADNOC Gas itself: the outlook "remains subject to developments in regional maritime conditions."

Physical damage is part of the picture too. Restoration work at the Habshan gas processing complex is progressing as planned, the company said, with full capacity expected back by the second quarter of 2027. That quarter begins roughly five months after this report.

CEO Fatema Al Nuaimi credited "strong execution across the business" and the company's integrated model for the rebound. She said the company delivered "despite continued challenging external conditions."

Looking for a way around the strait

Al Nuaimi said ADNOC Gas is examining alternative routes to supply customers, but has made no final investment or routing decision. The company needed to "de-risk," she said, and could not ignore the need to consider alternatives in the current environment.

Finance chief Peter van Driel separately said the group is exploring multiple options on the UAE's east coast, outside the strait. One option under consideration, according to the CEO's comments, is an LNG export facility on the east coast.

ADNOC Gas has not publicly confirmed a specific project, location, cost or timeline. ADNOC's leadership has used the line "supply only counts when it arrives" to frame its infrastructure thinking.

The crude pipeline question

A separate issue involves crude, not gas, and the parent company. On Nov. 4, Bloomberg reported, citing people familiar with the matter, that Abu Dhabi National Oil Co. is weighing a third crude pipeline from the UAE's western coast to Fujairah on the Gulf of Oman, possibly open to other companies. Bloomberg said ADNOC had discussed the idea with some Asian customers and that the route was not final.

ADNOC rejected the report. "We have advised Bloomberg that this report is not accurate and purely speculative," a spokesperson said.

The infrastructure already in place is documented. The existing line from Habshan to Fujairah has operated since 2012 and runs about 252 miles. Capacity figures differ by account: one source puts it at 1.5 million barrels a day, expandable to 1.8 million, while Bloomberg's figure is about 2 million.

A second line, the West-East Pipeline, is under construction. ADNOC said in May that it expects operations to begin in 2027 and to double export capacity through Fujairah. CEO Sultan Al Jaber said then that construction was 50% complete. Bloomberg reported last month, citing people familiar with the matter, that some Asian refiners were told they could begin collecting crude through that line at Fujairah in early 2027.

The UAE's effort is broader than pipes. Foreign Trade Minister Thani Al Zeyoudi has said the country plans to expand at least three east-coast ports and invest in rail and road links. Kuwait, which depends entirely on Hormuz for crude exports, has held talks with the UAE and Saudi Arabia about alternative routes, according to Kuwait Petroleum Corporation CEO Sheikh Nawaf Al-Sabah.

What comes next

ADNOC Gas has not announced a feasibility study, land agreement, regulatory approval or investment decision for any east-coast project. Any of those would be the first hard evidence that talk of bypassing Hormuz is turning into steel in the ground.

The nearer test is the $4 billion guidance floor, which depends on shipping conditions the company does not control. Habshan's return to full capacity is not due until the second quarter of 2027.