EXCLUSIVE: Engineering firms await design tender on $15bn sour gas development

08 June 2017

Abu Dhabi renews focus on sour gas projects to meet future demand

International engineering firms are anticipating a tender on the design of the estimated $15bn Hail and Ghasha sour gas development on Abu Dhabi, according to sources familiar with the project.

Project owner Abu Dhabi National Oil Company (Adnoc) is expected over the coming months to invite companies to bid for the front-end engineering and design (feed) for the largest oil and gas project in the pipeline in the UAE.

Due to the size of the offshore project, the feed contract is estimated to be worth as much as $100m, sources told MEED.

The Hail and Ghasha scheme is planned to install 1 billion cubic feet a day (cf/d) of additional gas capacity from sour gas reservoirs at the offshore fields following the success of Abu Dhabi’s first major sour gas development at the onshore Shah field completed in 2016.

Sour gas contains significant amounts of hydrogen sulphide which must be removed before the gas is used, making sour gas projects often more expensive and complex to carry out.

MEED revealed in May that US engineering group KBR is the frontrunner to win the project management consultancy (PMC) award on the project.

Austria-based oil company OMV, which has been carrying out studies at the Hail and Ghasha fields, is responsible for the tendering process on the PMC contract.

Energy Minister Suhail al-Mazroui said in May that the UAE is working towards fixing gas prices to enable the development of high-cost sour gas developments.

Al-Mazroui told a conference in Abu Dhabi that the UAE will focus on sour gas developments to meet its long-term energy needs and reduce the need to rely on costly liquefied natural gas (LNG) imports.

“There is plenty of gas in the emirates, but it is sour. Anything to do with reducing the cost of sour gas is going to be of interest. We cannot afford to only import LNG from outside,” he said.

Abu Dhabi completed its first major sour gas development – overseen by a joint venture of Abu Dhabi National Oil Company (Adnoc) and US-based Occidental Petroleum – at the onshore Shah field in 2016, with a total investment of about $10bn.

The Shah development is now set to be expanded in addition to new sour gas schemes at the onshore Bab field and offshore Hail and Ghasha fields.

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