Bloomberg has reported that oil giant Abu Dhabi National Oil Company (Adnoc) has awarded contracts worth almost $5.5 billion to more than three companies to provide key services for its Shah Sour Gas field development project. ConocoPhillips, the JV partner withdrew from the landmark venture last week.
Korea’s Samsung Engineering and Italy’s Saipem, Europe’s biggest provider of oilfield services by market value, have won an aggregate of about $5 billion in contracts for gas processing, sulphur recovery and other oil and gas services.
Saipem won three contracts worth $3.5 billion while Samsung said it secured a separate contract for $1.5 billion.
Saipem’s contracts are for $1.9 billion for gas processing, $1.45 billion for sulphur recovery and $196 million for product pipelines. Samsung will build utility and offsite facilities needed for the project.
A group comprising Tecnicas Reunidas and Punj Lloyd Group also won a joint contract worth $463 million for gas gathering in the project.
Adnoc said late last week that it is pressing ahead with the Shah sour-gas project after ConocoPhillips pulled out of the joint venture earlier in the week. Development of the Shah field is estimated to cost $10 billion, Saif Ahmad Al Ghafli, chief executive officer of the project, said in March. Shah will process 1 billion cubic feet (28 million cubic metres) of sour gas a day into more than 500 million cubic feet of fuel and 10,000 tonnes of sulphur, he said.
Fluor Corp. and CH2M Hill Companies unit Veco Corp. signed project management contracts for the Shah project on Thursday.
The UAE’s AL Jaber Group was awarded the early works package, estimated at $300 million in March.
ConocoPhillips, which would have been a 40 per cent stakeholder in the Shah venture, withdrew on April 28, marking its second withdrawal from a major Middle Eastern project in as many weeks. Prior to bailing on the Shah Field project the company withdrew from Saudi Aramco’s massive Yanbu integrated refinery project at Yanbu.
The front runners to replace ConocoPhillips are expected to be Shell, ExxonMobil and Total.
Total had previously been tipped as the JV partner for Abu Dhabi’s other large sour gas field, Bab, largely thanks to its sulphur handling and strong sour gas processing pedigree.
Fluor had previously carred out the FEED and preliminary works for the Shah project, and has worked closely with ADNOC group companies on technically challenging projects in the past.
