A vision for Abu Dhabi’s gas grid Al Fanar_-Moustafa-RASHAD

Our vision is to complete the natural gas grid in Abu Dhabi and to be ready for the second generation: green hydrogen.


A vision for Abu Dhabi’s gas grid

August 8, 2023

Moustafa Rashad, CEO of Al Fanar Gas, talks to The Energy Year about how the company’s one-stop-shop approach has positioned it as a gas distribution leader in the UAE and its contribution to developing gas-to-industry in the local market. Abu Dhabi-based Al Fanar Gas specialises in distribution systems for LPG, synthetic natural gas (SNG) and natural gas.

What position has Al Fanar Gas managed to establish as a one-stop-shop company?
Al Fanar is a market leader in the LPG sector, distributing more than 50% of ADNOC’s local production in the UAE, especially in Abu Dhabi and Dubai. We focus on EPC and maintenance of distribution systems for natural gas, LPG and SNG. We are a one-stop shop, carrying out work from A to Z rather than subcontracting to other companies.
Our scope of activities ranges from EPC to operational maintenance, gas supply, metering and billing. We are able to implement BOO [build-own-operate] and BOOT [build-own-operate-transfer] models and participate in PPPs. Thus, we are flexible and fully adapt to our clients’ needs.
Another of our strengths is the fact that we do everything in-house. The manpower and capabilities we have give us an edge when working with players such as ADNOC. In this regard, we are the only company that has won O&M works from the gas supply tenders recently launched by ADNOC Distribution. We receive a renewal notification from ADNOC on a yearly basis. All natural gas networks are owned by ADNOC, and we act as their O&M arm.

In what ways are you enabling gas supply to different regions in Abu Dhabi and Dubai?
We are operating Abu Dhabi’s entire natural gas grid. We are also the sole awardee of the first EPC project from ADNOC City Gas, awarded in 2016. Establishing a natural gas grid in Abu Dhabi was a major achievement, simply because previously gas was supplied in the city via LPG cylinders. This venture encompassed four packages designed to connect two of the emirate’s islands with the natural gas supply. Thanks to it, islands in Abu Dhabi such as Al Reem are now supplied with natural gas.
Our construction department has installed more than 150 kilometres of underground pipeline in Abu Dhabi to serve different islands and locations. We have a 90% market share in the EPC of gas infrastructure in Abu Dhabi. We have different branches across the emirates but our strongest presence is in Abu Dhabi and Dubai. In Dubai, we are involved in mega-projects such as Atlantis and Dubai Harbour.
In the area of gas supply, operations and maintenance, we are the largest market player in the UAE. In this regard, we cover around 95% of hotels in the country. For instance, we have an agreement with all the hotels under Abu Dhabi Hotels, in addition to Marriott and Four Seasons hotels. We will supply gas to all of these hotels for a 10-year period.


How are you contributing to enhancing the gas-to-industry model in the UAE?
One of the UAE’s objectives is to make sure there is a proper gas infrastructure network. A well-established gas grid can serve to boost natural gas utilisation today, as well as for grey, green and blue hydrogen use in the near future. We are advancing our position as providers and enablers of natural gas infrastructure across the country and in areas that are gas-hungry.
Along these lines, we have recently signed an agreement with AD Ports to set up a JV company called KEZAD Industrial Services which will oversee the enhancement of multiple offerings to industrial customers. Our agreement with KEZAD [Khalifa Economic Zones Abu Dhabi] will involve Al Fanar improving the natural gas network in several zones to secure the supply of gas to the different industries established there.
We recently signed an agreement for Zone 1 that includes the construction of more than 16 kilometres of network. We are confident about winning more phases given the near-future growth plans of AD Ports, to eventually serve more industrial zones in Abu Dhabi. We want to be the company constructing the infrastructure that feeds natural gas to this industrial expansion. We are proud to have a strong and long-lasting relationship with AD Ports Group and KEZAD Group, and this agreement strengthens our alliance in order that we can deliver better services and further develop the industrial ecosystem together.

Is the virtual pipeline model becoming more attractive for Al Fanar?
As an authorised distributor of ADNOC’s LPG, we are distributing more than 100 million litres of LPG per year, thanks to our huge fleet of road tankers. Further, these virtual pipelines are a crucial part of our offering. We move CNG to serve industrial areas that are far away from the natural gas grid. Virtual pipelines are ideal given the limitations of gas infrastructure.
We have recently added five new CNG trucks to serve Abu Dhabi and we are also looking at Bahrain as a potential market to expand to through the virtual pipeline model. We aim to further grow our virtual pipeline offering. We’ve also made our fleet more environmentally friendly by converting our 480 vehicles to CNG.

What technologies and systems are enhancing Al Fanar’s performance and client experience?
In 2010, Al Fanar was the first company to introduce automatic meter reading (AMR) to the UAE market. This is an in-house technology made to improve operational efficiency by automating the meter-reading process. Although at the time AMR was not mandatory, we took this initiative in order to improve the customer’s experience. We are also pioneers in implementing a smart metering system to streamline the process of gas monitoring and payment in the Etihad Tower Complex.
Now, we are collaborating with ADNOC to implement a large-scale AMR project. The venture is based on the HES [head-end system] model, under which ADNOC will monitor all of its meters and do retrofits to replace them with new AMR meters. This is a clear testament to the critical role technology is playing and the bet we are making on this space. We are also using AMR and ERP [enterprise resource planning] systems in our company to connect and synchronise all of our divisions.
Another key technology is our tracking systems. When it comes to our truck fleet, we can monitor our drivers and any specific vehicle 24/7. Technology is also helping us optimise the performance of our fleet, allowing every one of our trucks to cover less distance, and ultimately reduce emissions.
Lastly, we are embracing IoT. We have developed our Al Fanar Gas app, through which customers can pay remotely. It’s all about coming closer to our customers and making their lives easier. We put people first and we are trying to be as green as possible. Thus, digitalisation is critical in our approach as a company, and it will continue being so.

What is your strategy for diversifying and how do you aim to expand across the GCC?
We are taking major steps to grow the natural gas grid in the UAE. We want to be an enabler of the boom of industrialisation in this country while also serving as a driver of sustainability. Our vision is to complete the natural gas grid in Abu Dhabi and to be ready for the second generation: green hydrogen. We always want to be a step ahead and we aim to become an energy company, looking at opportunities in the areas of renewables and water.
In terms of geographical expansion, Saudi Arabia is a very prospective market for us. We have taken active steps to acquire Saudi companies, as well as collaborate and partner with them. We’ve also had a presence in Oman since 2008-2009. We have replicated the same model we have in the UAE and have a good portfolio of clients.

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