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FEED Contracts For Hail, Gasha And Dalma Ultra Sour Gas Offshore Project Awarded

ADNOC looks to sour gas reserves to help it deliver a more sustainable and economic gas supply

Tuesday, January 9, 2018
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 The Abu Dhabi National Oil Company (ADNOC) today awarded the two Front End Engineering Design (FEED) contracts for ADNOC's planned offshore ultra sour gas mega project, which consists of the Hail, Ghasha and Dalma fields. Bechtel (UK) was awarded Hail & Ghasha FEED Contract and TechnipFMC (UAE) was awarded Dalma FEED Contract, both contracts worth of multi hundreds-million Dirham contract.

In man-hours, the two FEED contracts collectively are the largest awarded by an oil and gas company, underpinning the criticality of a detailed FEED phase to optimize project cost and schedule. The project, in the north-western area of Abu Dhabi, could meet nearly 20 per cent of the UAE's gas demand by the second half of the next decade.

H.E. Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO said: "The growth in energy demand in Abu Dhabi, and the wider UAE, has prompted ADNOC to harness its gas resources, as part of its 2030 transformational strategy. This FEED award provides ADNOC with further smart growth potential by unlocking our undeveloped sour gas reserves and will help us to deliver a key strategic imperative which is to ensure a sustainable and economic gas supply."

In addition to awarding the FEED contracts, ADNOC is evaluating five Technology Licensors contracts, covering Gas Treatment Licensor; Sulphur Recovery Unit (SRU) Licensor; Natural Gas Liquids (NGL) Licensor; Condensates Recovery (Hydro treaters) and Hydrogen Generation Licensor. These technologies are critical to the successful execution of the FEED phase.

Abdulmunim Saif Al Kindy, Director of ADNOC's Upstream business said: "The decision to award the FEED contracts came after a rigorous and extremely competitive tendering process, ensuring we will strictly manage costs through working with contractors which can deploy effective engineering and robust value-add technologies. In progressing with these projects, we will create the potential to capitalise on our success and experience in ultra-sour gas production, gained from the development of the Shah field, the largest project of its kind in the world."

From the start of the FEED phase, ADNOC among the very few in the world, will implement an Integrated Project Delivery (IPD) approach. This will enable it to reduce the project's schedule and cost, by integrating and involving all relevant stakeholders, including potential EPC bidders, sub-contractors, major manufacturers and governmental bodies during the FEED, who are critical to review design quality, identify design's uncertainties and enhance the precision of required engineering jobs.

In the FEED commercial evaluation process, the generation of in-country value (ICV) was considered as one of the selection criterion for the successful bidder. This validates ADNOC's strategy to maximize the in-country value and encourage all international partners to consider the ICV element in their future commercial strategy.

The Hail, Ghasha and Dalma project taps into Abu Dhabi's Arab formation, which is estimated to hold multiple trillions of cubic feet of recoverable gas and from which the project is expected to produce more than one billion cubic feet of gas per day (cfd), enough gas to provide to two million homes with electricity.

The awarding of FEED contracts follows the awarding of the Project Management Consultancy and artificial islands Design and Survey Contracts to Artelia and KBR, formerly Kellogg Brown and Root.