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Adnoc awards Dh1.87b sour gas plant contract to Saipem

Issac John /Abu Dhabi
issacjohn@khaleejtimes.com Filed on June 15, 2021
EPC contract awarded by Adnoc Sour Gas to Italy’s Saipem after a competitive tender process

The latest contract awarding is within weeks after Adnoc announcing a Dh2.73 billion contract for the full field development of the Belbazem Offshore Block

Oil giant Adnoc announced on Tuesday the awarding of a Dh1.87 billion engineering, procurement, and construction (EPC) contract to Italy’s Saipem to expand the capacity of its Shah Sour Gas Plant.

The contract for the Optimum Shah Gas Expansion (OSGE) project was awarded by Adnoc Sour Gas (ASG). Over 50 per cent of the award value will flow back into the UAE’s economy under Adnoc’s In-Country Value (ICV) programme, Abu Dhabi’s state-owned oil major said in a statement.

The latest contract awarding is within weeks after Adnoc announcing a Dh2.73 billion contract for the full field development of the Belbazem Offshore Block.

The OSGE project is expected to be completed in 2023 and will increase the processing capacity of the plant by 13 per cent, from 1.28 to 1.45 billion standard cubic feet per day (SCFD). Shah, located 210 kilometres southwest of Abu Dhabi city, came on stream in 2015 and the OSGE project represents a cumulative expansion to 145 per cent of the plant’s original capacity, the oil major said.

“The scope of the OSGE project includes associated off-sites and utilities necessary to integrate the new facilities with existing installations, including gas gathering facilities, main gas plant, product pipelines and the sulfur granulation plant. The plant modifications have been designed for integration with existing facilities with no impact on the safety or integrity of the plant while minimising impacts on production during construction, interfacing and commissioning,” a statement said.

Yaser Saeed Almazrouei, Adnoc upstream executive director, said the Shah Gas Expansion Project is an excellent example of how Adnoc is growing its gas production at existing fields to deliver a more sustainable gas supply and support the UAE’s gas self-sufficiency objective.

“Importantly, the in-country value generated from the EPC contract award will help to stimulate the growth of the private sector and local economy as we navigate the post-Covid recovery and continue to meet the future energy needs of our nation,” said Almazrouei.

Tayba Al Hashemi, CEO of ASG, said the expansion would optimise the plant as well as improve both capacity and higher-end product recoveries, further growing our contribution as a safe and reliable supplier of gas to Adnoc and the UAE.

“It enhances Shah’s position as a hub of sour operations expertise, developing the skills and experience of the next generation of Emirati professionals. Saipem was awarded this contract following a rigorous, competitive tender process.”

ASG, a joint venture between Adnoc and Occidental, adopts an integrated single-field approach that covers upstream, midstream, and downstream activities. It operates the Shah field and is the only company in the world that processes more than one billion SCFD of ultra-sour gas from a single gas plant which also produces approximately five per cent of the world’s granulated sulfur.

— issacjohn@khaleejtimes.com


Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.

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