Contractors bidding for construction contracts on the $10bn-plus Shah sour gas development in Abu Dhabi have named the frontrunners for four of the main construction deals on the project, which together are worth an estimated $6.6bn.

The four deals cover an estimated $1.3bn engineering, procurement and construction (EPC) contract to build a gas processing plant at the field in the south of the emirate, and an estimated $1.2bn contract to install a sulphur recovery unit at the field. An estimated $1.1bn offsites and utilities package covers the insatllation of supporting infrastructure for the entire project. The fourth contract covers the construction of pipelines and is estimated to be worth about $1bn.

UAE Gas Production

Contractors submitted bids for the pipelines construction contract on 16 March, while final proposals for three other deals were submitted on 21 March.

The joint venture partners behind the project, Abu Dhabi National Oil Company (Adnoc) and the US’ ConocoPhillips, opened the bids on 22 March to get an idea of the overall cost of the project (MEED 22:3:2010). Contract awards are not expected until May.

Sources close to the bidding process tell MEED that Italy’s Saipem submitted the lowest prices for the pipelines, processing plant, and recovery unit contracts. While two companies – Paris-based Technip and Spain’s Tecnicas Reunidas – submitted the lowest bids for the offsites and utilities deal.

Abu Dhabi is seeking to produce 1 billion cubic feet a day of sour, or sulphur-rich, gas from the Shah field, before separating the sulphur from the natural gas and transporting both to processing and distribution facilities at Habshan and Ruwais.

The project has suffered delays in the past. In early January this year, ConocoPhillips and Adnoc delayed the final deadlines for the four main construction deals on the scheme until late March, as they reviewed the overall design of the project (MEED 12:1:10).

They originally planned to use a pipeline to transport the sulphur, but the local Union Railway Company was asked in October to look at the feasibility of building a 270 kilometres railway line instead, which would be used to transport granulated sulphur. A decision is due by the end of March, with Union Rail said to be aggressively pursuing its proposal.