$510MM Middle East Contract Goes to Saipem

$510MM Middle East Contract Goes to Saipem
ADNOC Sour Gas has awarded Saipem a contract to expand the Shah Sour Gas Plant. PHOTO SOURCE: ADNOC

A unit of Abu Dhabi National Oil Co. (ADNOC) has awarded Saipem an AED1.87 billion (US$510 million) contract to expand the capacity of its Shah Sour Gas Plant, ADNOC reported Tuesday.

Saipem’s receipt of the engineering, procurement, and construction contract from ADNOC Sour Gas (ASG) to expand the plant’s capacity 13% follows a competitive tender process, ADNOC noted in a written statement emailed to Rigzone.

According to ADNOC, the Optimum Shah Gas Expansion (OSGE) project will increase the six-year-old plant’s processing capacity from 1.28 to 1.45 billion standard cubic feet per day (scfd). The facility is located 130 miles (210 kilometers) southwest of Abu Dhabi city, ADNOC pointed out.

“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,” remarked ADNOC Upstream Executive Director Yaser Saeed Almazrouei. “Importantly, the In-Country Value generated from the EPC contract 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.”

ADNOC stated the OSGE work scope includes engineering, procurement, construction, pre-commissioning, and facilities start-up. It pointed out the project includes all associated off-sites and utilities need to integrate new facilities with existing installations – gas gathering facilities, main gas plant, product pipelines, and the sulfur granulation plant. Not only will the project increase plant production capacity, but also extend the existing gas gathering network and new pad facilities, added ADNOC.

“Shah’s expansion will optimize 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,” commented ASG CEO Tayba Al Hashemi. “It enhances Shah’s position as a hub of sour operations expertise, developing the skills and experience of the next generation of Emirati professionals.”

A joint venture of ADNOC and Occidental (NYSE: OXY), ASG operates the Shah field and distinguishes as the world’s only company that processes more than 1 billion scfd of ultra-sour gas from a single plant, ADNOC noted.

“The award of this new project by a key client such as ADNOC strengthens our long-lasting presence in the United Arab Emirates and is an additional recognition of our ability to carry out high-tech and complex projects in accordance with the highest safety and environmental standards,” stated Maurizio Coratella, chief operating officer of Saipem’s Onshore E&C Division. “We are pleased to contribute to the upgrading of this important plant for the country.”

ADNOC anticipates a 2023 project completion.

To contact the author, email mveazey@rigzone.com.


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