Adnoc awards $548m contract for gas line at Lower Zakum field

Contract will increase the field’s production capacity to 700 million standard cubic feet a day from 430 million

The Lower Zakum field offshore of Abu Dhabi. The latest project to increase gas production capacity at the field is expected to be completed in 2025. Photo: Adnoc

Abu Dhabi National Oil Company has awarded a $548 million contract to build a new main gas line at its Lower Zakum field as part of efforts to enable gas self-sufficiency for the UAE and cater to increasing global energy demand.

The contract will increase Lower Zakum field’s gas production capacity to 700 million standard cubic feet per day from 430 million, Adnoc said on Monday.

The engineering, procurement and construction contract was awarded by Adnoc Offshore to National Petroleum Construction Company after a competitive tender process.

The new pipeline will support the increased volume of associated gas produced by the Lower Zakum field as its oil production capacity increases to 450,000 barrels of oil per day by 2025, Adnoc said.

The project is expected to be completed in 2025.

"This contract award will enable us to produce more gas as we increase production capacity from Lower Zakum field," said Yaser Almazrouei, Adnoc's upstream executive director.

"This will support our integrated gas masterplan, which is driving competitive gas recovery to enable gas self-sufficiency for the UAE and industrial growth, while also helping to meet the increasing global demand for energy."

Natural gas is playing an increasingly important role in the energy transition as both a feedstock and a fuel since it burns with significantly lower-carbon intensity than coal.

In July, Adnoc announced its second discovery of natural gas this year in the first exploration well in Abu Dhabi’s Offshore Block 2 exploration concession operated by Eni.

The discovery from a new, deeper reservoir indicates one trillion to 1.5 trillion standard cubic feet of raw gas, almost doubling the discovered field volume, Adnoc said.

It builds on the initial finding in February 2022 from a shallower target, taking the total from this single well to between 2.5 trillion and 3.5 trillion standard cubic feet.

As part of the latest contract, a new subsea pipeline will be constructed that will run 85 kilometres from Zakum West Super Complex to Das Island.

It also includes provisions to construct, install and test a new platform at the complex, as well as a new gas-receiving centre at Das Island.

More than 75 per cent of the award value will flow back into the UAE economy under Adnoc's In-Country Value programme and job opportunities will be created for Emiratis by the contractor, the company said.

“Lower Zakum is a strategic asset for Adnoc and the UAE and working with our international partners, we will continue to responsibly unlock and maximise value from the field in line with Adnoc’s 2030 smart growth strategy," said Ahmad Al Suwaidi, chief executive of Adnoc Offshore.

"This award is an important part of the long-term development plan for the field and will help strengthen Adnoc’s position as a leading low-cost and low-carbon provider of energy for customers around the world.”

Adnoc Offshore has a production capacity of about two million barrels of oil and about three billion standard cubic feet of gas per day. Its operations extend across eight fields, six artificial islands, three natural islands and eight offshore super complexes.

The company's international concessions partners include ExxonMobil, Inpex-Jodco, CNPC, TotalEnergies, Cepsa, OMV, Eni and Falcon.

Including the latest contract, Adnoc Offshore and its international partners have invested more than $5 billion in recent weeks in the long-term development of Abu Dhabi's offshore operations, the company said.

That includes contracts worth more than $3.4bn awarded to Adnoc Drilling to accelerate offshore growth activities and a $1.1bn contract awarded to Adnoc Logistics and Services to improve offshore operations.