Abu Dhabi National Oil Company (Adnoc) is set to sign pre-construction service agreements (PCSA) with contractors shortlisted to bid for its Hail and Ghasha offshore sour gas field development project.

Adnoc is close to signing PCSAs with the two consortiums, comprising three contractors each, that have formed for the offshore and onshore packages of the Hail and Ghasha scheme, sources told MEED.

The PCSAs will involve the consortiums starting detailed engineering works on the Hail and Ghasha offshore and onshore packages, and possibly even early procurement for long-lead items required for the project, according to the sources. 

The estimated values of the offshore and onshore PCSAs are between $100m and $150m each, the sources added.

Adnoc declined to comment on the information when approached by MEED.

MEED in September last year reported on contractors submitting proposals for the detailed engineering work on the Hail and Ghasha megaproject as part of an early engagement process.

The PCSAs Adnoc is preparing to sign with the two consortiums are understood to be based on the proposals received last year.

Italian contractor Saipem, Abu Dhabi’s National Petroleum Construction Company (NPCC) and state-owned China Petroleum Engineering & Construction Company (CPECC) have formed a consortium for the offshore scope of work on the Hail and Ghasha project.

France-headquartered Technip Energies, South Korean contractor Samsung Engineering and Italy’s Tecnimont have teamed up for the onshore work.

Project progress

The early engagement process with contractors is expected to accelerate towards the EPC execution phase of the strategic Hail and Ghasha project, which was initiated in early 2019.

Technip Energies has performed the revised front-end engineering and design (feed) work on the project as part of a contract that Adnoc awarded in November 2021.

The revised feed works aim to reduce the overall capital expenditure on the scheme, which was previously estimated to be as high as $15bn.

The value of engineering, procurement and construction (EPC) work on the offshore and onshore scope of work on the Hail and Ghasha scheme is estimated to be as high as $5bn and $5.5bn, respectively, as per sources and based on the previous version of the project.

Following the award of the PCSAs, the consortiums will get to work on the detailed design aspect of their respective packages, with the aim of putting together a final offer for the main EPC work on Hail and Ghasha.

The timing of the award of the final EPC contracts is unknown at this point, but considering the fast-track execution schedule Adnoc is known to have planned for the Hail and Ghasha project, it could be expected to take place before the end of this year.

Hail and Ghasha fields

The Hail and Ghasha fields, along with the Hair Dalma, Satah, Bu Haseer, Nasr, Sarb, Shuwaihat and Mubarraz fields, are located in Abu Dhabi’s offshore Ghasha concession.

Adnoc holds the majority 55 per cent stake in the Ghasha concession. The other stakeholders are Italian energy major Eni with 25 per cent; Germany’s Wintershall Dea with 10 per cent; and Austria’s OMV and Russia’s Lukoil, each with 5 per cent.

Adnoc plans to produce more than 1.5 billion cubic feet a day of sour gas from the Ghasha concession by the middle of this decade. This target is aligned with the company’s broader goal of achieving gas self-sufficiency for the UAE by 2030.

In November 2021, Adnoc and its partners in the Ghasha concession awarded two EPC contracts for the Dalma offshore sour gas development project. Abu Dhabi’s National Petroleum Construction Company (NPCC) and Spain-headquartered Tecnicas Reunidas won contracts worth $1.46bn for executing offshore and onshore EPC works on the Dalma project, respectively.

Four artificial islands have already been completed in the Ghasha concession, and development drilling is under way.

In addition, Adnoc awarded two contracts totalling $2bn to its subsidiary Adnoc Drilling in July last year for the Hail and Ghasha offshore sour gas field development project.

The awards comprise a $1.3bn contract for integrated drilling services and fluids, and a $711m contract for the provision of four island drilling units. Their duration is 10 years.

Adnoc also awarded a third contract, valued at $681m, to another subsidiary company, Adnoc Logistics & Services, to provide offshore logistics and marine support services for the planned Hail and Ghasha development.