Final bids have been submitted on the first of a series of major construction deals on the $10bn Shah sour gas development in Abu Dhabi, sparking optimism the project is moving ahead after a series of delays.
At least six international engineering firms submitted price proposals for the $1bn-plus engineering, procurement and construction (EPC) contract to build a series of pipelines to carry natural gas, condensates, and natural gas liquids from the Shah field to processing and distribution facilities at Habshan in the north of the emirate.
|UAE Gas Production, 1998-2008 (million cubic feet a year)|
Bidders included China Petroleum Engineering & Construction Company (CPECC), Athens-based Consolidated Contractors Company (CCC), India’s Dodsal, the UAE’s National Petroleum Construction Company (NPCC), India’s Punj Lloyd, and Italy’s Saipem.
Contractors bidding on the deal hope to hear news on the prices submitted or a contract award by the end of April. It would be the first major deal to be awarded on the project by the joint venture partners Abu Dhabi National Oil Company (Adnoc) and the US’ ConocoPhillips after a series of lengthy delays.
The partners want 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.
Firms submitted technical bids for the four main process units at Shah in November, and originally expected to be asked for cost proposals by the end of December. Adnoc and Conoco have since pushed back the bid deadlines on the deals repeatedly. Most recently, Abu Dhabi Gas Industries Company (Gasco), the Adnoc subsidiary which is tendering the deals, set a 21 March deadline for prices.
Contractors see the submission of prices for the pipeline as a sign that the partners are finally pushing ahead with the scheme.
The deadline postponements are widely attributed to indecision over the best way to transport the sulphur from Shah to Habshan and Ruwais. The partners plan to use either a railway line or technically complex liquid sulphur pipelines (MEED 18:1:2010).
Studies for both schemes are currently under way. Sources close to the project say that Adnoc and Conoco currently favour the sulphur pipeline plan.