Adnoc pushes ahead with tenders on $10bn Shah gas scheme

15 January 2010

Management tender goes ahead despite changes to key construction packages

The joint venture partners behind the $10bn Shah gas development in Abu Dhabi are pushing ahead with plans to award the project management contracts on the scheme, despite delaying the bid deadline for the main construction packages by several months.

Sources close to the project say that Abu Dhabi National Oil Company (Adnoc) and the US’ ConocoPhillips are keen to award the two project management consultancy (PMC) deals as soon as possible, as they need help to assess the cost and scope of the overall development.

Three US engineering firms, Bechtel, Fluor, and Veco, are competing for the contracts. The successful bidders will oversee the engineering, procurement and construction work to produce, process and distribute 1 billion cubic feet a day of sour, or sulphur-rich, natural gas from the Shah field, which lies 80 kilometres south of Abu Dhabi.

Gas produced at the field will be stripped of its sulphur, which will then be transported separately for processing and distribution facilities at Habshan and Ruwais. The natural gas will pass along the same route.

One company will oversee work on the first four engineering, procurement and construction (EPC) packages on the scheme, covering gas-gathering and processing facilities, the sulphur recovery unit, and offsites and utilities at Shah. This contractor will also manage early works at the Shah site and the construction of non-process buildings.

Under the existing plans, a second firm will oversee the construction of the 275-km gas and liquid sulphur pipelines linking Shah to Habshan and Ruwais, as well as the sulphur-handling terminal and dredging works at Ruwais.

However, Adnoc and Conoco are still considering an alternative scheme for transporting the sulphur, which would involve processing the sulphur at Shah before transporting it by railway to Ruwais (MEED 13:10:09).

This would mean a significant change to the scope of the second deal, and has led the partners to delay the final bid deadlines for a series of construction deals, which had been due in December and January, until later in the first quarter of this year.

Abu Dhabi Gas Industries (Gasco), the Adnoc subsidiary which is tendering the deals, has told firms hoping to bid on the contracts to build the gas processing and sulphur recovery units at Shah that the deadline for price proposals had been pushed back from 25 January to 4 March.

Sources close to the firms working on bids for the project management deals say that Adnoc and Conoco want to push ahead with the PMC tenders as they need help in assessing the likely cost and logistics of the two alternative transportation routes for the sulphur.

“There are no delays on the PMC contracts,” says a source at one bidder. “They want to get someone else in and mobilised as soon as possible to help them out.”

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