Bids have gone in for another major construction contract on the $10bn Shah gas development in Abu Dhabi, in what contractors see as a further sign that the project will move ahead in the second quarter of the year.
International firms submitted commercial bids for the estimated $1.5bn engineering, procurement and construction (EPC) contract on 28 March. It covers the construction of gas gathering facilities at the southern Shah field, which are capable of handling up to 1 billion cubic feet a day of gas.
Contractors have now submitted bids for five of the main EPC contracts on the project to produce gas from the field.
The joint venture partners behind the scheme, Abu Dhabi National Oil Company (Adnoc) and the US’ ConocoPhillips, opened the bids for the product pipelines, gas processing, sulphur recovery, and offsites and utilities deals on 22 March, although contract awards are not expected before 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 most competitive bids for the offsites and utilities deal.
Abu Dhabi wants 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 264 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 and held tender meetings for the project on 24 March.