Adnoc LNG awards Dh3.16bn construction deal for gas development expansion project

Adnoc LNG signed the EPC deal with a consortium of Spain's Tecnicas Reunidas and Abu Dhabi’s Target Engineering Construction

The LNG arm, based offshore on Das Island, has been operational since 1977. Courtesy Adnoc

Adnoc LNG, a subsidiary of Abu Dhabi National Oil Company, awarded a Dh3.16 billion ($860m) engineering, procurement and construction (EPC) contract to a joint venture of Spanish and UAE companies as the unit moves ahead with developing the second phase of its Integrated Gas Development Expansion (IGD-E) project.

Adnoc LNG signed the engineering, procurement and construction contract with Spain's Tecnicas Reunidas and Abu Dhabi’s Target Engineering Construction, it said in a statement on Wednesday. Around half of the contract's value will flow into the local economy in line with Adnoc’s mission to capture financial returns for the UAE, it said.

Tecnicas will lead the JV and carry out the engineering and procurement for the project, while Target will undertake the construction and commissioning works on Das Island.

“This agreement is a significant milestone as we work across the gas value chain to further integrate our offshore and onshore gas systems,” Fatema Al Nuaimi, the acting chief executive of Adnoc LNG, said. “It will enable us to deliver greater efficiency and performance, maximise the value of our gas assets and pursue our strategic objective to ensure a sustainable and economic gas supply that meets Abu Dhabi’s growing energy needs.”

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The UAE last year approved a five-year spending plan of Dh400bn to be invested in exploring for the country’s sour gas reserves as well as acquiring and developing downstream assets abroad. Adnoc's facilities currently process 10.5 billion standard cubic feet of gas per day and produce some 40 million tonnes annually of refined products, such as granulated urea, liquefied petroleum gas, naphtha, petrol, jet fuel, gas oil and base oils, fuel oil, as well as feedstock for chemicals.

Work on Adnoc’s Dh40bn IGD-E programme began in 2009, with the aim of transferring 1 billion cubic feet a day (cfd) of high-pressure gas from the offshore Umm Shaif field, via Das Island, to Adnoc gas processing’s onshore facilities at Habshan and Ruwais, which was completed in 2013.

The first phase of the IGD-E project was launched in 2015 and finished in August this year. That helped boost Adnoc’s offshore gas processing capacity by 400 million cfd to 1.4 billion cfd. Phase one included the construction of a fourth gas dehydration unit and dry gas compression aftercooler on Das Island, gas pipelines with a 117-kilometer offshore segment and 114-kilometre onshore segment and modifications to the Habshan gas processing complex.

The second phase of Adnoc’s IGD-E project will take 54 months to complete. It will add 245m cfd of associated gas to 1.4bn cfd of offshore gas to be processed for use in power generation.

The full scope of the contract encompasses engineering, equipment and material supply, construction, installation, testing and commissioning of compression, drying and gas treatment units, as well as power generation and other auxiliary services, Adnoc said.

The consortium will construct and commission the new gas processing facilities on Das Island, which includes a new booster compression train with a capacity of 60m cfd, as well as two feed gas compression and dehydration trains, each having a capacity of 123m cfd and two amine-based fuel gas treatment units with 80m cfd capacity each, the company said.