The UAE hydrocarbons projects market is poised for a sharp increase in activity in the second half of 2012 after an 18-month slump as several major new offshore developments reach the engineering, procurement and construction (EPC) phase.

Abu Dhabi National Oil Company (Adnoc) is investing heavily as part of a plan to boost its offshore production capacity to 1.75 million barrels a day (b/d) from 1.1 million b/d currently, with much of the investment earmarked for the next six months.

Based on current schedules, clients in Abu Dhabi are expected to award $8.75bn in EPC contracts in the second half of 2012, more than the previous three halves combined.

EPC contract awards in UAE hydrocarbons sector
  Petrochemicals Gas Oil
First half 2011 200 935 400
Second half 2011   480 1,512
First half 2012     2,620
Second half 2012   1,085 7,665
EPC=Engineering, procuurement and construction; f=Forecast. Source: MEED Projects

In the first half of 2012 there were only three major awards, making it easily the quietest period for contract awards in recent years, according to regional projects tracker MEED Projects. The first five months were eclipsed by the huge $2.47bn package awarded to South Korea’s Samsung Engineering in June to develop a carbon black plant and delayed coker unit in Ruwais, Abu Dhabi.

The award, by Abu Dhabi Refining Company (Takreer), was the single biggest award in the UAE hydrocarbons sector for over two years since Abu Dhabi Polymers Company (Borouge) awarded a $3bn contract for its Ruwais polymers expansion in April 2010.

Although the first half of 2012 was slow in terms of contract awards, 16 major projects are expected to be awarded before the end of the year. These are set to be dominated by the UAE’s two major offshore operators – Abu Dhabi Marine Operating Company (Adma-Opco) and Zakum Development Company (Zadco).

Zadco started the second half with the $800m EPC1 award for the construction of offshore early production facilities on its Upper Zakum field to the local National Petroleum Construction Company (NPCC) and France’s Technip. The larger EPC2 offshore section, estimated in a range of $2-4bn, is set to be awarded by the end of the year.

Adma-Opco is set to award four major oil and gas packages on its Satah al-Rasboot (Sarb) and Umm al-Lulu offshore full-field developments. The packages, not including additional civil contracts, are estimated to total $1.95bn.

Elsewhere, Abu Dhabi Gas Industries (Gasco) is set to award an estimated $450m EPC contract to develop a pipeline from its gas processing hub in Habshan to industries in Taweelah. Market sources indicate that Dubai-based Dodsal is the frontrunner to win the contract.

The first half of 2013 is also forecast to be a relatively busy period with 12 major projects likely to move ahead, including the full-field development contracts for Zadco’s Upper Zakum field and Adma-Opco’s Nasr field. The resurgence of activity in Abu Dhabi’s hydrocarbons sector comes as good news to contractors after the relatively barren 2011 and early 2012.