Adnoc awards Dalma gas project to Petrofac and Sapura

19 February 2020
The contracts for the $1.65bn Dalma offshore sour gas field development project were signed at the Adnoc headquarters in Abu Dhabi

Abu Dhabi National Oil Company (Adnoc) has announced the award of the engineering, procurement and construction (EPC) contracts for the $1.65bn Dalma offshore sour gas field development project.

The Dalma project consists of two main EPC packages, with the offshore and onshore scope of work split into separate packages.

MEED had earlier reported that UK-headquartered Petrofac had emerged as the frontrunner to win both Dalma offshore and onshore packages.

Adnoc stated that a consortium of Petrofac and Malaysian contractor Sapura has been awarded Package A, which relates to the offshore works on the Dalma project.

Adnoc said the contract value of Package A is $591m. Petrofac is the majority partner in the consortium.

Package B, relating to the project’s onshore aspect, has been awarded solely to Petrofac at $1.065bn.

The official EPC contracts signing ceremony took place at the Adnoc headquarters in Abu Dhabi. The contracts were signed by Adnoc’s new upstream executive director Yaser Saeed Almazrouei, Petrofac’s chief operating officer – engineering & construction George Salibi, and Tan Sri Shahril Shamsuddin, president and Group CEO of Sapura Energy.

Dalma sour gas scheme

The Dalma offshore sour gas field is located in Abu Dhabi’s Ghasha ultra sour gas concession. Adnoc has undertaken this project to raise gas production from the asset, as part of its 2030 strategic goal of producing enough gas to transform Abu Dhabi into a net gas exporter.

The Dalma gas development project is expected to produce around 340 million cubic feet a day (cf/d) of natural gas from 2022, when EPC works on both packages are scheduled to be completed.

France’s TechnipFMC has performed the front-end engineering and design (feed) works on the project, as part of its January 2018 contract.

The scope of work on Package A relates to EPC works on four offshore wellhead towers, pipelines and umbilicals in the Hair Dalma, Satah, and Bu Haseer fields.

Main works on Package B, the bigger of the two Dalma packages, involves the building of gas conditioning facilities for gas dehydration, compression and associated utilities on Arzanah Island located 80 kilometres from Abu Dhabi city. The gas will then be sent to Habshan gas processing plant for further processing that is required to produce sales gas, condensate, and sulphur.

“The successful bids by Petrofac and Sapura Energy prioritized UAE sources for materials, local suppliers and workforce, resulting in a total spend of over $1.15bn which will flow into the UAE’s economy,” Adnoc said in its statement.

About 70 per cent of the total contract award value will flow into the UAE’s economy under Adnoc’s In-Country Value programme, the company said.

Intense competition

The race to win the Dalma EPC packages has been hard-fought among key EPC contractors operating in the UAE.

MEED has been reporting extensively on the Dalma sour gas field development project, from the Feed tendering and bid submission phases through to the bid evaluation stage.

Weeks after the submission of bids, Abu Dhabi government-owned National Petroleum Construction Company (NPCC) emerged as the initial frontrunner for Package A.

NPCC had reportedly even begun mobilisation works on the offshore package.

State-owned China Petroleum Engineering & Construction Corporation (CPECC) initially pulled ahead in the race for Package B.

However, Petrofac maintained a keen interest both packages, and is understood to have maintained a constant negotiation channel with Adnoc for both packages.

When Adnoc, which was initially expected to have formally awarded the Dalma project in November last year during the ADIPEC event, approached contractors for revised bids, Petrofac submitted the most competitive price for both packages, and teamed with Sapura for the offshore package.

Ghasha mega sour gas concession

The Dalma gas development project is a key component of Adnoc’s Ghasha concession development plan, which is expected to produce over 1.5 billion cf/d of gas – enough to provide electricity for more than two million homes – when it comes on stream around 2025.

Adnoc maintains a majority 55 per cent stake in the concession, while Italy’s Eni (25 per cent), Germany’s Wintershall Dea (10 per cent), Austria’s OMV (5 per cent) and Russia’s Lukoil (5 per cent) are the other stakeholders in the hydrocarbons resource base.

The Ghasha concession has the potential to meet nearly 20 per cent of the UAE’s gas demand by the second half of this decade. In addition, more than 120,000 barrels a day of oil and high-value condensates are expected to be produced when the project is fully on stream.

Separately, in December MEED reported that Adnoc had awarded project management consultancy (PMC) agreements to three international firms to manage packages in its Ghasha offshore sour gas concession.

Adnoc signed the PMC agreements with US-based KBR, Canada-headquartered SNC-Lavalin and France’s TechnipFMC on 15 December.

Adnoc is understood to have allocated an estimated budget of $400m for the Ghasha project management.

KBR has been appointed the lead project management firm for the Ghasha concession with a 50 per cent share of the PMC structure. SNC-Lavalin and TechnipFMC will hold 30 per cent and 20 per cent shares respectively.

The budget is expected to be distributed between the three firms on a 50:30:20 per cent ratio.

The Ghasha ultra-sour gas concession comprises of the Hail, Ghasha, Dalma, Nasr, Sarb, Bu Haseer, Shuweihat and Mubarraz offshore sour gas fields in the emirate of Abu Dhabi.

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