Adnoc awards $1.65bn worth of contracts for development of Dalma gas project

Petrofac and a joint venture between Petrofac and Sapura Energy won a contract each to construct offshore facilities to develop gas production

An oil pipeline control head sits on display outside the entrance to the Abu Dhabi National Oil Company (ADNOC) headquarters in Abu Dhabi, United Arab Emirates, on Thursday, Feb. 22, 2018. Adnoc is seeking to create world’s largest integrated refinery and petrochemical complex at Ruwais. Photographer: Christopher Pike/Bloomberg
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Abu Dhabi National Oil Company awarded two contracts worth $1.65 billion (Dh6.05bn) to construct offshore facilities for the Dalma gas development project.

The engineering, procurement and construction contracts were given to Petrofac Emirates and a joint venture between Petrofac and Malaysia's Sapura Energy through its subsidiary's branch office in the capital.

Both contracts are expected to be completed in 2022 and will enable the Dalma gas development project to produce around 340 million standard cubic feet per day (mmscfd) of natural gas, Adnoc said on Tuesday.

This award marks another important milestone in the development of the Ghasha concession which is an integral component of our strategy to achieve gas self-sufficiency for the UAE," said Yaser Almazrouei, executive director of Adnoc's upstream directorate.

“Petrofac and Sapura Energy were selected to deliver this crucial project after an extremely competitive and rigorous tender process that ensures that 70 per cent of the award value will flow into the UAE’s economy as in-country value, stimulating local economic growth and supporting the diversification of the nation’s economy in line with the leadership’s wise directives,” he said.

The state-owned company last year announced the discovery of additional reserves of 7 billion "stock tank" barrels of oil, 58 trillion cubic feet of conventional gas and 160 tcf of unconventional gas in November. Earlier this month, Adnoc and the Dubai Supply Authority also signed an agreement to jointly develop a shallow field straddling the Dubai-Abu Dhabi border, with 80 tcf of reserves.

The first offshore package for the Dalma project, valued at $591 million, is awarded to a venture between Petrofac and Sapura Energy. The companies will execute the engineering, procurement and construction of four offshore wellhead towers, pipelines and umbilicals in the Hair Dalma, Satah and Bu Haseer fields.

The second contract, valued at $1.065bn, is awarded to Petrofac to carry out the engineering, procurement and construction of gas conditioning facilities for gas dehydration, compression and associated utilities in Arzanah Island – located 80 kilometres from Abu Dhabi city. The gas will subsequently be moved to the Habshan gas processing plant to produce sales gas, condensate and sulphur.

“These latest contract awards build on our existing relationship with Adnoc group companies and we look forward to delivering this mega project in a safe, successful and sustainable manner,” said George Salibi, Petrofac’s chief operating officer, engineering and construction.

The successful bids by Petrofac and Sapura Energy prioritised UAE sources for materials and workforce, resulting in a total spend of more than $1.15bn, which will flow into the UAE's economy. Petrofac has "a strong track record" in the UAE, with about 3,000 staff in the country, Mr Salibi said.

The Dalma gas development project is a key component of the Ghasha mega-project, which will produce over 1.5 billion cubic feet per day of gas – enough to power more than two million homes –when it becomes operational.

The Ghasha ultra-sour gas concession comprises of the Hail, Ghasha, Dalma, Nasr, Sarb, Bu Haseer, Shuweihat and Mubarraz offshore sour gas fields in Abu Dhabi. Adnoc maintains a majority stake in the concession while Italy’s Eni, Germany’s Wintershall Dea, Austria’s OMV and Russia’s Lukoil hold the remaining shares.