Abu Dhabi delays bidding on Shah scheme by two months

11 September 2009

Deadlines for sour gas project changed after pressure from potential bidders

The deadlines for technical bids on three key contracts for Abu Dhabi’s $10bn-plus Shah sour gas development have been pushed back by two months.

Pressure from contractors has led the joint venture partners behind the project to offer firms an extra two months to prepare bids on three engineering, procurement and construction (EPC) contracts.

Abu Dhabi National Oil Company (Adnoc) and the US’ Conoco-Phillips have agreed to extend the deadline for the main gas-processing packages from 10 September until 3 November.

The pair have set a tentative deadline for commercial bids, which outline cost structures, of December 2009.

“The original September tender date was set at short notice and many of the contractors wanted more time to find partners and generally look over their designs,” says the business development manager of a South Korean firm bidding on the deal.

“There are a lot of projects going on at the moment, so people are struggling to get their proposals together on time.”

The joint venture partners are tendering 10 construction contracts – labelled EPCs 1 to 10 – on the Shah scheme.

The first four packages cover gas gathering and processing facilities at Shah.

The remaining packages cover product and sulphur pipelines linking the field to processing and export facilities at Habshan and a sulphur-handling and export terminal at Ruwais, near Abu Dhabi.

The postponed contracts are EPCs 2-4. These are the contracts to build the main facilities for processing the gas produced at the Shah field and stripping it of sulphur. EPC 2 is the contract to build the main process plant on the Shah field, which will be used to stop any potential overflows of oil and gas, to remove dangerous hydrogen sulphide gas, to separate sulphur from natural gas, and to compress and route the gas to export pipelines.

EPC 3 is the contract to build a sulphur-recovery unit to process and produce 10,000 tonnes a day of sulphur across four gas trains. The company that wins this contract will also build four 88MW power generators and a high-pressure steam generator.

The winner of EPC 4 will build the main offsites and utilities for the processing facility.

These include storage facilities for condensates, natural gas liquids, diesel and chemicals, steam units, flare gas recovery units, air and nitrogen processing facilities, and a 220kV electrical substation.

MEED reported in August that the Adnoc and ConocoPhillips joint venture had set a technical bid deadline of 21 December for the Shah field’s gas-gathering complex, which is known as EPC 1 (MEED 14:9:09).

The pair have asked firms to bid for all of the remaining contracts in October, with the exception of the sulphur pipeline package which has been delayed to allow for more design work.

MEED estimates Adnoc and its subsidiaries will award more than $30bn of EPC contracts between March 2009 and March 2010.

Adnoc and ConocoPhillips want to develop the Shah gas field in the south of the emirate so that it can produce 1 billion cubic feet a day (cf/d) of sour, or sulphur-rich, natural gas.

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