State-owned Abu Dhabi National Oil Company (Adnoc) plans to award a series of engineering, procurement and construction (EPC) contracts next year as part of its development of two offshore sour gas fields in the Gulf, sources close to the company said.

The first contracts will cover the construction of six artificial islands at the Hail and Ghasha gas fields. These are expected to be awarded before the end of January.

EPC contracts for the planned new production facilities, which will be housed on the islands, will be awarded before the end of 2019.

The islands project is scheduled for completion within 36 months from the planned start date in May next year, while the facilities will be built in 40 months and completed by the Q3 of 2023, the sources said.

US-based Bechtel was awarded the front-end engineering and design (feed) contract for the Hail and Ghasha fields earlier this year. Nine companies were prequalified to bid for the island construction deal, which involves dredging and rock works. They are understood to have submitted bids to Adnoc in late August.

The Hail and Ghasha project is one of Adnoc’s largest sour gas field’s developments and is forecast to produce about one billion cubic feet of sour gas a day (cf/d). Once facilities are complete, Adnoc will be able to produce its first gas from the two fields in early 2024.

The project is a key part of Adnoc’s strategy to ramp-up gas production to meet growing domestic demand.

While Bechtel is carrying out the feed for Hail and Ghasha, France’s TechnipFMC is doing the feed for Dalma, another sour gas field containing high levels of hydrogen sulphide. All three fields are located in Abu Dhabi’s North West Area.

Their development is expected to produce more than 1 billion (cf/d), which Adnoc has said would meet about 20 per cent of the UAE’s current demand.

In November 2017, Adnoc announced a $109bn spending programme over the next five years, with much of the budget earmarked for the development of sour gas reserves. Although technically challenging and expensive to develop, the resources will help the emirate reduce its reliance on costly imported gas.

Many of the fields that are lined up to be developed over the next few years are offshore, along with the onshore Bab field. Shah, another onshore field has already been producing around 1.5 billion cf/d for a number of years.

The $10bn Bab Sour Gas Project has stalled since Shell, which held a 40 per cent stake, pulled out in January 2016 saying the development did not fit with the company’s strategy.