Abu Dhabi National Oil Company (ADNOC) is looking to raise $2bn by floating 4% of its new gas processing and marketing company ADNOC Gas in an initial public offering (IPO), two sources told Reuters.

ADNOC Gas was formed through a merger of the operations, maintenance, and marketing of ADNOC Gas Processing and ADNOC LNG.

The UAE’s national oil company plans to start an IPO for the new natural gas business on 23 February 2023, reported Bloomberg News.

The final offer price is scheduled for 3 March 2023 while trading is planned to commence ten days later.

People familiar with the matter told the news agency that the deal would give the business a valuation of $50bn, making ADNOC Gas one of the world’s largest listed gas firms.

For 2023, ADNOC Gas is expected to pay $3.25bn in dividends.

ADNOC Gas has a pipeline network of over 3,250km, as well as eight onshore and offshore assets. It has a production capacity of approximately ten billion standard cubic feet of gas per day.

Over the next seven years, ADNOC Gas is planning $14bn in capital expenditure for growth-related work.

The IPO forms part of ADNOC’s efforts to strengthen its gas business as Europe looks to replace Russian gas as early as mid-2024 because of Western sanctions on Moscow, following its invasion of Ukraine.

Over the past two years, ADNOC has listed fertilisers and clean ammonia products maker Fertiglobe, petrochemicals company Borouge, and ADNOC Drilling.

Furthermore, the firm is planning to list its logistics and services unit, according to Bloomberg News.