Italy’s Saipem is looking for a new subcontractor to work on an estimated $1.4bn engineering, procurement and construction (EPC) deal it hopes to win as part of the wider $10bn-plus Shah gas development in Abu Dhabi.
The contractor submitted the lowest bid for three of the five EPC packages that the partners behind the giant sour gas development tendered in March: the $1.4bn gas process plant, the $1.2bn sulphur recovery unit, and the estimated $1bn main product pipelines for the scheme.
A consortium of Spain’s Tecnicas Reunidas and India’s Punj Lloyd submitted the lowest bid for the estimated $475m gas gathering facilities package, while South Korea’s Samsung Engineering is confident it is the favourite to win the estimated $1.4bn offsites and utilities deal.
Sources close to the project say Saipem plans to use India’s Dodsal as its main construction contractor on the pipelines and sulphur recovery deals, but the clients on the scheme, the US’ ConocoPhillips and Abu Dhabi National Oil company, has ruled the company out from working on the third package.
“They are in talks with the partners over who they use and have also talked to a lot of other contractors about working with them on the project,” says one executive with close ties to the development.
At least three engineering firms have submitted cost proposals for the subcontractor job, another contractor tells MEED.
Contractors are still waiting for news of a final investment decision on the project from Conoco, and expect the US energy major to announce its plans before it issues its company results on 29 April (MEED 2:4:2010).
The companies want 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 April.