Fluor lands oversight role at Shah project

Abu Dhabi National Oil Company has hired the US engineering company Fluor to extend its involvement with the Shah sour gas project by becoming its manager.

Abu Dhabi National Oil Company (ADNOC) has hired the US engineering company Fluor to extend its involvement with the Shah sour gas project by becoming its manager, as the emirate prepares to go it alone on the US$10 billion (Dh36.72bn) project. Fluor said it was awarded a $160 million contract to oversee the project and provide management consultancy services for its main components.

"After completing front-end engineering and design services for the Shah gas development programme, we are pleased to be chosen as the programme manager for this important upstream gas project," said Peter Oosterveer, the president of Fluor's energy and chemicals group. Fluor holds the licence for the sulphur-recovery technology to be used at Shah, which is expected to produce 500 million cubic feet per day of sales gas and 10,000 tonnes of sulphur a day when it comes on stream in 2014.

ADNOC, the government-owned petroleum company, is understood to be seeking bids for the construction of a sulphur granulation plant at Shah. The UAE's Union Railway is planning to build a spur of its proposed national rail network to transport the sulphur to export facilities at Ruwais. In April, ADNOC awarded more than $5bn of contracts related to the gas development, which is needed to alleviate Abu Dhabi's chronic shortage of the fuel for power generation and industry, and for injection into its ageing oilfields to maintain their output.

The awards came immediately after its former partner, the US petroleum group ConocoPhillips, had quit the development. ADNOC has vowed to continue with Shah with or without another partner. But Mohammed al Hamli, the Minister of Energy, said this month an experienced international partner was needed because the technical and public-safety challenges of developing gas with a high concentration of hydrogen sulphide, which is toxic and corrosive.

Shah's gas contains about 23 per cent hydrogen sulphide as well as 7 per cent carbon dioxide, putting it in the "ultra-sour" category. [e-mail]