Adnoc has said it is talking to potential partners for help with the US$12 billion development of the Shah sour gas field after ConocoPhillips withdrew from the project earlier this year, a company official has told the  Zawya Dow Jones newswire.
“Adnoc is in talks for joint venture partnerships,” Saif Al Ghafli, Adnoc representative and CEO of Adnoc affiliate Abu Dhabi Gas Development Co., said in Abu Dhabi after signing four contracts with international companies as part of the Shah project.
Al Ghafli did not reveal which companies Adnoc is talking to, though Shell is thought to be a front runner, possesing both the technical capabilities to pull the project off, and was hotly tipped as the partner of choice before ConocoPhillips won the original joint venture partnership contract.
Adnoc has embarked on a search for potential partners to join it on Shah after ConocoPhillips pulled out from the development in April. The US oil major had committed to being the joint venture partner, but later withdrew to focus on projects yielding short and medium-term revenues. The Shah project is seen as a long-term contributor to value, ConocoPhillips said at the time.
The Shah sour gas field development is seen as essential to help Abu Dhabi meet gas demand in the Emirate, which has surged as the government builds gas-fired power stations, desalination plants and develops industries such as petrochemicals.
The project aims at producing one billion cubic feet a day of sour – or sulfur-rich – gas and stripping out the sulfur and transporting it to processing and export facilities.
Plans for Shah have been held up due to the technical difficulties linked to developing the field’s large reserves of sour gas, which is highly corrosive and more costly and challenging to process as it requires special handling and infrastructure.
Al Ghafli said Monday the project was set to come on stream in the third quarter 2014 and Adnoc would press on with its plans even if it failed to bring on board a partner.
“We are not holding things back til a partner comes, we’re already awarding contracts,” Al Ghafli said.
Abu Dhabi Gas Development earlier Monday signed four contracts with Saipem, Samsung Engineering, Technicas Reunidas, and Punj Lloyd for various packages on the field development.
Adnoc is also in ongoing talks with the UAE’s state-run Union Railway Co. over transporting the toxic sulfur, which will be a byproduct from the sour gas development, via a section of Union’s proposed 1,100km rail network to export facilities at Ruwais on the Persian Gulf coast. Â
“If a deal is agreed, Union will build the rail line and Adnoc will pay to use it,” Al Ghafli said.
Abu Dhabi Gas Development in June awarded the $160 million PMC contract services on the Shah project to Fluor.
