By Summer Said

DUBAI--The United Arab Emirates' national energy company plans to sell a stake of about 4% of its natural-gas business in an initial public offering that it hopes will raise $2 billion, as Middle East petrostates ramp up plans to supply Europe.

The Abu Dhabi National Oil Co., or Adnoc, will sell more than 3 billion shares in Adnoc Gas, one of the world's largest gas-processing entities, on the Abu Dhabi Securities Exchange on Thursday. Shares are expected to begin trading on March 13.

Adnoc Gas was formed earlier this year after Adnoc combined its liquefied-natural gas and gas-processing arms as part of a push to boost output and trading of liquefied natural gas. Abu Dhabi recently delivered its first shipment of LNG to Germany, as Europe increasingly turns to the Middle East after shunning its main supplier of gas, Russia, over the invasion of Ukraine.

Over the long term, Abu Dhabi sees natural gas as an important part of the future energy mix with renewables and nuclear.

"Natural gas is central to the energy transition," Khaled Al Zaabi, acting group chief financial officer of Adnoc, said in a statement.

If the IPO raises $2 billion as hoped, it would be the biggest on record in Abu Dhabi, according to people familiar with the matter. After the offering, Adnoc will own about 91% of the shares, all of which will have been paid in-full, while Abu Dhabi National Energy Co., or Taqa, will own approximately 5%.

Adnoc Gas expects to pay dividends of $1.625 billion in the fourth quarter of this year for the first half of 2023 should the IPO go through. A further payment of $1.625 billion will be made in the second quarter of 2024 for the second half of 2023.

The IPO is the latest in a recent wave of mega listings across the Gulf region, led by Saudi Arabia and the United Arab Emirates. Both countries are actively taking banking on high energy prices to take state-owned companies public.

Adnoc has already listed a number of its subsidiaries over the past couple of years including its petrochemicals company Borouge PLC and Adnoc Drilling Co.

Write to Summer Said at

(END) Dow Jones Newswires

02-17-23 0314ET