Fresh doubts raised over progress on Shah gas development

16 February 2009
Sources close to the $12bn Shah sour gas development planned by Abu Dhabi National Oil Company (Adnoc) say that progress on the project is in doubt due to the economic climate and delays to the design process.

The Shah sour gas development will produce and process more than 1 billion cubic feet a day (cf/d) of sour gas once complete.

A source at one contractor, which prequalified for engineering, procurement and construction (EPC) work on the project, says that “given the current economic climate” he is not sure when the bidding process for the contracts might be opened or whether the project will go ahead as planned.

Firms were asked to prequalify for the ten EPC contracts in October 2008, but since a meeting for bidders in January there had been no news on when the bidding process might start.

Front end engineering and design (FEED) is yet to be completed, the source adds, which is seen as a precursor to a final investment decision being made.

The US’ ConocoPhillips, Adnoc’s joint venture partner on the project said in November that a final investment decision would be made on the scheme once FEED had been complete.

Another source close to the project says that FEED is being “finalised” and should be completed by the end of February, but that Adnoc could still ask for changes.

Completion of FEED had originally been slated for early February.

The US’ Fluor Corporation is undertaking FEED on the project for Abu Dhabi Gas Industries (Gasco), the Adnoc subsidiary which is managing the scheme. Australia’s WorleyParsons is the project manager.

The FEED is in three parts: a gas collection system and product pipelines; a gas plant; and a sulphur management system.

The gathering system will take fluids from the Shah field wells to the Shah plant, and the product pipelines will then take gas, condensate and natural gas liquids to Habshan, 65 miles southwest of Abu Dhabi city.

Doubts were raised in November about the level of interest surrounding the 75-kilometre-long sulphur pipeline package on concerns, over safety and maintenance on the scheme.

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