Adnoc awards $700 million contract to UK-based engineering and construction giant

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UK-listed engineering and construction giant Petrofac has landed a $700 million onshore engineering, procurement and construction (EPC) deal from state-owned Abu Dhabi National Oil Company (Adnoc) for work on a new gas compressor plant involving its Habshan Complex.

Petrofac on Friday confirmed the development and said the award comprises “three gas compressor trains, associated utilities and power systems”.

The company noted that the new plant will support Adnoc to substantially increase gas output from the Habshan Complex, west of Abu Dhabi.

Upstream recently reported that up to five leading regional and international contracting giants had been competing for the coveted onshore deal.

Elie Lahoud, chief operating officer of Petrofac’s engineering and construction segment, said the company has a “long and strong track record supporting Adnoc in the UAE”.

“This focus on in-country value will once again underpin our approach to delivery for Adnoc on the strategically significant Habshan Complex,” he stated.

The Habshan award marks one of the largest onshore EPC deals awarded by Adnoc this year and the first for Petrofac since it was allowed to resume participation in Adnoc tenders, following its blacklisting by the state-owned operator.

Gas capacity expansion

Abu Dhabi is spending billions of dollars to scale up its gas production capacity, with the aim of achieving gas self-sufficiency while also emerging as a key liquefied natural gas exporter in the long term.

The emirate’s gas-based expansion projects are also underpinned by its ambition to emerge as a key player in the global blue hydrogen market, as it increases its focus on lowering carbon emissions.

Adnoc Gas Processing, a subsidiary of Adnoc, conducted the tender process for the Habshan gas compression facility.

Contenders that lost out to Petrofac included a grouping of Spain’s Tecnicas Reunidas with Abu Dhabi’s National Petroleum Construction Company (NPCC); a consortium of China Petroleum Engineering & Construction Corporation (CPECC) and Greek player Archirodon, India’s Larsen & Toubro and Egypt’s Enppi, Upstream understands.

Multiple gas compressors

At least three gas compressors are likely to be involved at the Habshan facility, each having a capacity of more than 400 million cubic feet per day.

Adnoc Gas Processing operates a 3000-kilometre integrated gas sales pipeline network spanning Abu Dhabi.

Adnoc chief executive Sultan Ahmed Al Jaber has highlighted the United Arab Emirates’ ambitions to become a key LNG exporter on the back of several gas-focused upstream developments, including the multi-billion dollar Hail & Ghasha sour gas project.

The UAE’s LNG ambitions are also said to be a part of a strategic move to reduce its dependence on imported Qatari gas.

The nation receives about 1.8 billion cubic feet per day of Qatari gas via the Dolphin pipeline and also has LNG purchase agreements with its neighbour.

Abu Dhabi currently has the capacity to produce about 11 Bcfd of natural gas and about 1.3 Bcfd of sour gas.

The emirate’s ongoing gas developments are expected to deliver additional production of more than 3 Bcfd, a company spokesperson earlier told Upstream.

Hail & Ghasha alone is expected to add 1.5 Bcfd of gas production capacity by the end of this decade.

Abu Dhabi has also laid down plans to expand the potential of its huge Shah gas project, develop the Umm Shaif gas cap reservoir and exploit the unconventional gas at its Ruwais Diyab concession.

Source: upstreamonline.com

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