Abu Dhabi National Oil Company (ADNOC) is moving ahead with its largest ever gas project as it invites companies to express interest in designing a sour gas development on the offshore Hail and Ghasha fields, according to sources familiar with the scheme.

The Hail and Ghasha development has a planned capacity of 1 billion cubic feet a day (cf/d) of gas in addition to condensate, making it around twice the size of Abu Dhabi’s recently-completed Shah sour gas development.

The UAE does not produce enough associated gas to meet its domestic needs and undertaken a programme of sour gas developments to help plug the supply-demand gap.

Sour gas fields contain significant volumes of hydrogen sulphide, which need to be extracted before use and either sold or utilised in chemical industries.

Adnoc has several invited companies to express interest in a tender on Hail and Ghasha project’s front-end engineering and design (feed) contract. These companies include:

• Amec Foster Wheeler (UK)
• Bechtel (US)
• Fluor (US)
• Technip (France)
• WorleyParsons (Australia)

Adnoc is expected to invite companies to bid on the feed work later in the first quarter and the contract should be awarded later in 2016.

Adnoc is likely to form a joint venture with an international oil company (IOC) to carry out the development, which is likely to cost over $10bn.

US-based Occidental Petroleum (Oxy) – which has a 40 per cent stake in the completed onshore Shah Gas Development – was awarded a $500m contract by Adnoc in February 2015 to carry out a technical evaluation at the Hail and Ghasha fields.

Oxy has cooperated with Adnoc on activities including 3D seismic surveys, drilling of appraisal wells and conducting of engineering studies necessary for the fields’ development. It was expected to take two years to carry out the technical evaluation of the two fields.

Oxy will likely be among the companies Adnoc invites to submit proposals for a new joint venture to carry out the Hail and Ghasha development.

The UAE produced 5.6 billion cubic feet a day (cf/d) of gas in 2014 and consumed 6.7 billion cf/d, according to BP’s annual global energy review.

The new capacity from Hail and Ghasha represents a near 18 per cent increase on the UAE’s existing production, which will give the country a significant boost in meeting future demand.

Adnoc is planning to develop a second major sour gas project at the Bab onshore field in a partnership with UK/Dutch Shell.

Shell announced in April 2013 it had agreed to take a 40 per cent stake in a new joint venture to operate the project, which is anticipated to be a similar size to Shah with 500 million cf/d of sales gas. However, the joint-venture agreement has yet to be signed.

MEED reported in April 2015 that Adnoc had selected companies for contracts on the feed and project management consultancy (PMC) work for the project but it will not proceed to execution until a joint venture agreement is completed.