Adnoc delays final Shah gas package decision again

25 April 2011

Sources do not expect frontrunner to change

Abu Dhabi Gas Industries (Gasco) has further delayed the contract award of the final engineering, procurement a construction (EPC) contract for the final package of the Shah gas development project.

The Abu Dhabi National Oil Company (Adnoc) subsidiary has asked bidders to extend the validity of their bid bonds by two weeks. They are due to expire on 25 April.

The delay will have no impact on the frontrunner status of Athens-based Consolidated Contractors Company (CCC), which submitted the lowest bid at bout $500m-$550m.

“If the difference was close, then you could expect things. But 10 million dollars is a big difference,” says a source close to the project.

A source at a bidding company confirmed that they were not active in trying to climb the bidding list.

“In case of new bidding or some other big issue in which we can participate again, we can move forward, but at this moment there is no information on big changes,” he says.

The delay is put down to a traditionally slow decision making process at the national energy company. “This is not unusual for Adnoc and Gasco,” says the bidding source.

The contract covers the construction of sulphur granulation facilities with a capacity of about 7 million tonnes a year (t/y) at the Shah field, located 190 kilometres south of Abu Dhabi city. The project also includes liquid sulphur storage tanks and solid sulphur granule storage facilities, conveying systems and a marine terminal.

Once completed in 2014, the project will increase Adnoc’s gas production by 1 billion cubic feet a day (cf/d), as the national oil company is seeking to boost its total production to 6 billion cf/d from its current 4.5 billion cf/d. To make the gas usable for power generation, its sulphur content will need to be extracted. The processed sulphur will then find use in the petrochemicals industry.

Other than CCC, the bidding companies are:

  • Daelim (South Korea)
  • GS Engineering & Construction (South Korea)
  • Hyundai (South Korea)
  • Punj Lloyd (India)
  • Saipem (Italy)
  • Samsung Engineering (South Korea)
  • Tecnimont (Italy)
  • Al-Jaber Group (local)/Techint Group (France)

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications