Adnoc signs deals for world’s largest sour gas development

Reuters

• Deals with NPCC, Saipem and Tecnimont
• $16.9bn to develop Hail and Ghasha fields
• Abu Dhabi aims for gas self-sufficiency

Abu Dhabi state oil producer Adnoc has awarded engineering, procurement and construction contracts worth nearly $17 billion for its Hail and Ghasha sour gas development, the biggest of 30 agreements the energy giant signed at the Adipec conference this week.

Adnoc awarded an offshore package worth $8.2 billion to a joint venture between the National Petroleum Construction Company (NPCC) and Saipem, an Italian oilfield services company.

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Abu Dhabi chose Tecnimont, a Milan-based engineering subsidiary of the Italian group Marie, for the onshore EPC package worth $8.7 billion.

The scope of work includes carbon and sulphur recovery handling – two gas processing units, three sulphur recovery sections, associated utilities and offsites as well as export pipelines. The Italian company will also provide digital solutions aimed at reducing emissions and optimising energy consumption.

Saipem and NPCC will carry out the work on artificial islands. The project includes four drilling centres and one processing plant, various offshore structures and more than 300km of subsea pipelines.

Gas self-sufficiency

Adnoc’s plans are for the Hail and Ghasha fields, part of Abu Dhabi’s Ghasha concession, the world’s largest offshore sour gas development. Sour gas contains high levels of sulphur which makes it highly toxic unless treated.

The fields are set to produce more than 1.5 billion cubic feet a day of natural gas by the end of the decade. 

Total value of the development amounts to $27 billion, according to industry sources. It includes the construction of artificial islands, which started in 2019.

The project is a part of Abu Dhabi’s drive to expand gas production capacity by 2030 to achieve gas self-sufficiency and meet rising demand for liquefied natural gas (LNG) exports. In 2008, the emirate launched its Shah gas field.

“Natural gas is an important transition fuel and Adnoc will continue to responsibly unlock its gas resources to enable gas self-sufficiency for the UAE, grow our export capacity, and support global energy security,” Abdulmunim Al Kindy, Adnoc’s upstream executive director, said in a statement.

The project has been delayed, as in May Adnoc terminated two contracts critical for its development.  

Adnoc added that the scheme will capture 1.5 million tonnes per year (mtpa) of CO2, raising its committed investments for carbon capture capacity to almost 4 mtpa, adding it would be the first in the world to operate with net-zero CO2 emissions.

The CO2 will be captured, and transported onshore, where it will be sequestered underground.

Adnoc produces 24 million tonnes of CO2 annually at its own upstream oil and gas production operations. The company brought forward its net zero carbon emissions target to 2045. It said it plans to capture 10 mpta of CO2 by 2030, up from a previous target of 5 mpta.

Adnoc on Tuesday announced it would install a 10-tonne-per-day carbon capture unit manufactured by UK-based Carbon Clean at a nitrogen fertiliser plant owned by Fertiglobe, a joint venture between it and Dutch fertiliser company OCI.

It also signed an agreement with US petroleum giant Occidental to investigate the feasibility of building a direct air capture facility in the UAE.

Adnoc announced reaching the final investment decision and the award of the contracts for the Hail and Ghasha project on the last day of the Adipec conference. 

It has also signed agreements with 30 companies for local manufacturing opportunities worth up to AED10 billion to stimulate the local supply chain.

By 2027, Adnoc aims to include AED70 billion ($19 billion) of locally manufactured products in its procurement pipeline, as part of the “Make it in the Emirates” initiative to stimulate industrial growth and create more private sector jobs for UAE nationals.