Adnoc awards Feed contracts for offshore sour gas recovery projects

State-owned Abu Dhabi National Oil Company (Adnoc) has awarded front-end engineering and design (Feed) contracts for its offshore ulta-sour gas fields, as the emirate looks to ramp-up gas production to meet growing domestic demand.

UK's Bechtel was awarded the Feed contract for Hail and Ghasha, while the contract for the Dalma field was awarded to UAE-based TechnipFMC. The Feed study for the mega-project is set to be completed by the end of 2019, after which engineering, procurement and construction tenders are expected to be awarded, according to an Adnoc spokesman. He declined to comment on the value of the contract, citing confidentiality agreements but said they were in the range of "hundreds of millions of dirhams".

Known collectively as the North-West Area, the the three fields tap into Abu Dhabi’s Arab formation, which is estimated to hold multiple trillions of cubic feet of recoverable gas. The project is expected to produce more than 1 billion cubic feet of gas per day (cfd), about 20 per cent of the UAE’s current demand which is enough to provide electricity to two million homes, Adnoc said in a statement on Tuesday.

"The growth in energy demand in Abu Dhabi, and the wider UAE, has prompted Adnoc to further harness its gas resources, as part of its 2030 smart growth strategy. This Feed award provides Adnoc with the potential to unlock additional undeveloped sour gas reserves and will allow us to deliver against our strategic objective to ensure a sustainable and economic supply of gas,” Dr Sultan Ahmed Al Jaber, UAE Minister of State and Adnoc Group chief executive said.

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Abu Dhabi announced a spending plan of $109 billion in November, mainly to unlock its sour gas reserves to meet growing power needs. Natural gas meets almost 98 per cent of the UAE's power requirement, which is currently met through imports of two billion cubic feet a day of gas through the Dolphin Pipeline. The UAE is also considering importing liquefied natural gas from the US to meet peak summer demand.

Adnoc announced a five-year spending plan of $109 billion in November, mainly to unlock its sour gas reserves to meet growing ­power needs.

Natural gas meets almost 98 per cent of the UAE’s power requirement, which is currently met through imports of two billion cfd of gas through the Dolphin Pipeline.The UAE is also considering importing liquefied natural gas from the US to meet peak summer demand.

Adnoc is evaluating five technology licensor contracts to support the Feed process that will cover treatment, sulphur recovery unit, natural gas liquids, condensates recovery and hydrogen generation, according to its statement.

Adnoc’s upstream business director Abdulmunim Saif Al Kindy said the company was looking to “strictly manage costs” through working with contractors and was looking to deploy experience gained from Abu Dhabi’s ultra-sour Shah gas field development.

US contractor KBR and French design firm Artelia were last year awarded the project management consultancy (PMC) contract to manage Feed on the three gasfields.

Infrastructure requirements for the development include design and construction of eleven offshore artificial islands. KBR is expected to complete the PMC work over 24 months, with an option to extend for another 12 months, according to KBR.