ADNOC awards $510mn worth contract to Italy’s Saipem for gas plant capacity expansion

By Shilpa Annie Joseph, Desk Reporter
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Shah Sour Gas Plant
Representational Image

UAE state-owned oil company, Abu Dhabi National Oil Company (ADNOC) has awarded the Italian multinational oilfield services company Saipem a $510 million (AED1.87 billion) Engineering, Procurement, and Construction (EPC) contract to expand the capacity of its Shah Sour Gas Plant.

The EPC contract for the Optimum Shah Gas Expansion (OSGE) project was awarded by ADNOC Sour Gas, the subsidiary of ADNOC, to the Italian company after a competitive tender process.

According to the company statement, “Over 50 percent of the award value will flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) program, reinforcing ADNOC’s commitment to ensuring more economic value remains in the country from the contracts it awards.”

The OSGE project, which will be completed in 2023, will expand the Shah Gas Plant’s processing capacity by 13 percent, from 1.28 to 1.45 billion standard cubic feet per day (SCFD). Located 210 kilometers southwest of Abu Dhabi city, the project represents a cumulative expansion to 145 percent of the plant’s original capacity.

Yaser Saeed Almazrouei
Yaser Saeed Almazrouei
Upstream Executive Director
ADNOC

“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. Importantly, the In-Country Value generated from the EPC contract award will help to stimulate the growth of the private sector and local economy as we navigate the post-COVID-19 recovery and continue to meet the future energy needs of our nation.”

The scope of work of the OSGE project includes engineering, procurement, construction, pre-commissioning, commissioning, and startup of facilities to boost plant production capacity as well as the extension of the existing gas gathering network and new pad facilities.

Ms. Tayba Al Hashemi, CEO of ASG said, “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.”

“It enhances Shah’s position as a hub of sour operations expertise, developing the skills and experience of the next generation of Emirati professionals. Saipem was awarded this contract following a rigorous, competitive tender process,” she further added.

ADNOC Sour Gas

ADNOC Sour Gas, a joint venture between ADNOC and Occidental, uses a single-field integrated approach that includes upstream, midstream, and downstream activities. It operates the Shah field and is the only company in the world that processes more than 1 billion SCFD of ultra-sour gas from a single gas plant which also produces approximately 5 percent of the world’s granulated sulfur.

Related: ADNOC awards $318mn worth EPC contract to link smart wells at Bu Hasa


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