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Adnoc set to re-tender huge Abu Dhabi offshore sour gas project

Abu Dhabi giant set to re-invite bids for sour gas development after earlier this year cancelling two key EPC contracts

Abu Dhabi National Oil Company (Adnoc) is poised within weeks to retender its $1.5 billion-plus Dalma offshore sour gas development on the Ghasha concession.

Multiple people familiar with the development said that Adnoc aims to soon invite contractors that were previously technically pre-qualified to participate in the Dalma re-tender exercise.

“We are hoping that the Dalma tender will be out within the next two to three weeks,” one person said.

Potential scope change

A second source said that Adnoc plans to reduce the project’s scope and further optimise costs during the novel tender process.

“There’s no clarity yet on the new scope that is likely to be offered but it is expected to be scaled down to reduce costs,” he said.

Another person said that the new tender process is expected to be limited, with only technically pre-qualified players likely to be invited to bid.

Those expected to be invited for Dalma’s onshore work include UK’s Petrofac, China Petroleum Engineering & Construction Corporation (CPECC), Italy’s Saipem, Canada’s SNC-Lavalin, South Korea’s Hyundai E&C, Abu Dhabi-based Target Engineering and Consolidated Contractors Company.

For the offshore part Abu Dhabi’s National Petroleum Construction Company (NPCC), McDermott International of the US and Saipem are expected to queue up.

Some other players could also be in the fray but this could not be confirmed by Upstream.

Earlier cancellations

Adnoc earlier this year cancelled two large contracts worth $1.65 billion previously awarded to a grouping of Petrofac and Malaysia’s Sapura Energy for its Dalma sour gas development.

Petrofac had won the onshore EPC package involving the surface facilities required for Dalma, while a second package comprising the offshore facilities had been awarded in February to the pairing of Petrofac and Sapura.

Petrofac earlier this year said that package one, which was worth $1.065 billion, encompassed the gas processing and associated facilities on Arzanah and Zirku islands.

The package one workscope included inlet facilities with gas processing and compression units, power generation units, utilities and other associated infrastructure.

Package two, worth $591 million, included three new wellhead platforms, the removal and replacement of existing topsides, new pipelines, subsea umbilicals, and composite and fibre optic cables.

The offshore package also comprised the installation of several segments of 14-inch-diameter pipeline between the shallow-water platforms and Arzanah Island.

Five new subsea umbilicals, composite cables and a gas export pipeline from Arzanah to Zirku Island were another part of the marine workscope.

At Arzanah, Adnoc plans to set up inlet facilities, gas dehydration units, a gas booster, condensate treatment unit, fuel gas systems and other facilities.

Key gas development

The Dalma development is expected to add more than 300 million cubic feet per day of gas peak production to the UAE’s output.

TechnipFMC in 2018 won a front-end engineering and design contract for Dalma, having previously been involved with pre-FEED work on the offshore project.

More than $10 billion-worth of projects in Abu Dhabi are understood to be in the tender stage, awaiting award by Adnoc.

In addition to Dalma, the state-controlled giant is also tendering for its Hail & Ghasha and Umm Shaif Gas Cap developments, with the two projects together thought to be worth billions of dollars.

Both Hail & Ghasha and the Umm Shaif Gas Cap projects had been expected to be awarded by March but they are now expected to face major delays.

The various ongoing conventional gas developments in Abu Dhabi are expected to add at least 2 billion cubic feet per day of production over the next three to four years.

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