Contractors receive four-week extension to Shah gas deadline

20 October 2009

Joint venture partners may substantially alter scope of $10bn scheme

Contractors in Abu Dhabi have successfully lobbied for a four-week extension to the bid deadline on the $1bn contract to build a network of gas pipelines across the emirate.

The engineering, procurement and construction (EPC) contract is part of a $10bn scheme to produce 1 billion cubic metres a day of sour, or sulphur-rich, gas reserves from the Shah field in the south of the emirate.

Contractors say that the joint venture partners on the scheme, the state-run oil firm Abu Dhabi National Oil Company (Adnoc) and the US’ ConocoPhillips, agreed to the extension in early October.

Adnoc and ConocoPhillips originally asked contractors to submit technical bids, outlining engineering proposals, on 11 October.

They have now pushed back the deadline until 4 November. The 10 December deadline for commercial bids setting out cost structures remains unchanged.

Contractors say that they asked for an extension because Adnoc failed to give them enough time to prepare their bids. The joint venture partners are reassessing the scope of the entire project, and so were willing to allow bidders more time, says a senior executive at one of the bidding firms.

“Because there is a lot of work that still needs to be done on the design of the project, Adnoc is pretty happy to give extensions here where it would not necessarily on other projects,” he says.

Adnoc has yet to decide how it will transport sulphur from the Shah field to its processing facilities at Habshan and its export terminal at Ruwais. The national oil company and its US partner originally planned to build a 275-kilometre-long pipeline heated to 120-155°C to carry the sulphur. However, they are now considering an alternative 264km railway line.

If it chooses the railway, Adnoc will have to substantially alter the scope of the project, according to a senior executive close to the scheme.

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