Abu Dhabi gas output plan advances as deals signed

Gasco, a unit of the Abu Dhabi National Oil Company (ADNOC), has finalised the main contracts for a Dh40 billion project.

Gasco, a unit of the Abu Dhabi National Oil Company (ADNOC), has finalised the main contracts for a Dh40 billion (US$10.89bn) project to boost gas output amid rapidly growing demand. Abu Dhabi is a major exporter of gas under long-term contracts, but has recently realised it could face a shortage in supply for the domestic market because of the blistering pace of economic development.

The four engineering, procurement and construction contracts worth a combined Dh33.7bn were signed last Thursday at Gasco's headquarters in the capital with firms from the US, Italy and South Korea. The contracts were originally announced in July and are scheduled for completion in 2013. They are for facilities that will allow Gasco and two other ADNOC subsidiaries, Abu Dhabi Gas Liquefaction and Abu Dhabi Marine Operating Company, to co-ordinate the production and processing of gas from Abu Dhabi's main offshore and onshore oil and gasfields.

That will enable the emirate to increase gas production as it expands its oil output capacity, and to process the gas more efficiently, freeing up more fuel and feedstock for power generation and industry. The Integrated Gas Development Project "is the Government of Abu Dhabi's strategic initiative towards meeting the growing demand for energy within the emirate", Gasco said. The deals include: a Dh17.4bn processing agreement covering the production of an additional 900 million cubic feet per day of sales gas, 1,200 tonnes per day of gas liquids and 5,200 tonnes per day of sulphur from Abu Dhabi's biggest onshore fields at Habshan; a Dh6.3bn contract for utilities at Habshan; a Dh8bn contract for the production of 27,000 tonnes per day of gas liquids at a processing facility at Ruwais, on Abu Dhabi's coast; and a Dh2bn contract for gas liquids storage at Ruwais.

A consortium of JGC of Japan and Tecnimont of Italy won the Habshan gas processing contract, while the Habshan utilities contract went to Hyundai of South Korea. Another Korean firm, GS Engineering, teamed up with the UAE unit of the international oilfield services firm Petrofac to land the Ruwais liquids extraction deal, and CBI, a US firm, won the Ruwais storage contract. @Email:[e-mail]