Abu Dhabi prepares to award Bab sour gas deals

12 January 2015

Early study on estimated $10bn gas field development awarded to US engineering group Fluor

Abu Dhabi is preparing to award key design and management contracts on its Bab sour gas development, according to sources familiar with the scheme.

The estimated $10bn project, a key part of the emirate’s future gas supply strategy, will be carried out by a proposed joint venture of state-owned Abu Dhabi National Oil Company (Adnoc) and UK-Dutch oil major Shell.

Abu Dhabi has awarded some early stage contracts on the scheme, with US-based Fluor carrying out the pre-front-end engineering and design (pre-feed) study and Australian group WorleyParsons appointed as the project management consultant (PMC) for the pre-feed phase, sources say.

WorleyParsons declined to comment on contract awards for the Bab project, while Fluor could not be reached for comment.

Adnoc is managing the early tendering stages through its majority-owned joint venture Abu Dhabi Gas Industries (Gasco), pending the finalisation of the Shell joint venture.

The company has now tendered the project’s feed study and the PMC contract to oversee the feed phase.

Companies submitting proposals for the PMC tender include:

  • Amec Foster Wheeler (UK)
  • Jacobs (US)
  • Technip (France)
  • WorleyParsons (Australia)

Fluor, which was the feed contractor for Abu Dhabi’s $11bn under-commissioning Shah sour gas development, is thought to be in a strong position to resume the role for Bab.

In April 2013, Shell announced it had agreed to take a 40 per cent state in a new joint venture to operate the project.

The Bab sour gas reservoirs, located 150 kilometres southwest of Abu Dhabi city, will be costly and technically challenging to develop due to high levels of toxic hydrogen sulphide, which must be removed through processing.

The development is expected to have a capacity of about 1 billion cubic feet a day (cf/d) of sour gas, which will be processed to a smaller amount of sales gas and associated sulphur and liquid petroleum gas (LPG), similar to Abu Dhabi’s under-development Shah gas project.

Shell plans to utilise the sulphur produced at Bab for local industries such as concrete, bitumen replacement and fertiliser production, due to the volatile nature of the global sulphur market.  

Adnoc aims to start production at the Bab sour gas field by 2020, which should allow for the main engineering, procurement and construction (EPC) contracts to be awarded in 2016.

Abu Dhabi’s first major sour gas project, the similar-sized Shah, is operated by Al-Hosn Gas – a joint venture of Adnoc and US-based Occidental Petroleum. The development will have the capacity to produce 500 million cf/d of sales gas.

In November 2014, Adnoc director-general Abdulla Nasser al-Suwaidi said that Shah was being commissioned and is likely to start production in early 2015.

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