Abu Dhabi’s National Petroleum Construction Company (NPCC) has confirmed the award of an offshore pre-construction service agreement for Abu Dhabi National Oil Company (Adnoc)’s multibillion-dollar Hail & Ghasha sour gas development.
NPCC said on Thursday that it “has received a letter of award from Adnoc” for the PCSA deal involving offshore facilities for the giant project.
The Abu Dhabi player said it would execute the project together with its joint-venture partners Saipem and China Petroleum Engineering and Construction Corporation (CPECC).
“The total value of the project related to the LoA is about 220 million Emirati dirhams [$60 million],” NPCC said.
The contractor noted the LoA “covers the early project activities such as initial detailed engineering and procurement of critical long-lead items”.
“The PCSA scope of work also includes the preparation of an open-book estimate for the full project delivery scope, which will be considered as part of Adnoc’s final investment decision making process,” it added.
South Korean giant Samsung Engineering, Italy’s Tecnimont and Technip Energies of France recently confirmed the award of the onshore PCSA from Adnoc.
Tecnimont said: “The overall contract value to the joint venture for the early engineering and procurement works on the onshore facilities is approximately $80 million.”
The two awards confirm an Upstream report of last year, that claimed the two groups were well positioned to land coveted deals from Adnoc for the Hail & Ghasha development.
The two Hail & Ghasha contractual packages are expected to be together worth billions of dollars once the project gets to the execution phase.
The development is at the heart of Abu Dhabi’s drive to expand its gas production capacity by the end of this decade.
After completion of the project’s initial engineering phase, the two groups will work on the onshore and offshore engineering, procurement and construction packages, project watchers said.
A final commercial offer for Hail & Ghasha’s execution is likely to be submitted by the middle of this year by the two groups, Upstream understands.
Gas export plans
Development of the Hail and Ghasha fields is crucial to Abu Dhabi’s ambition to achieve gas self-sufficiency for the United Arab Emirates and enable it to emerge as a key gas exporter in the long term.
“Overall, the development of our abundant sour resources will support UAE gas self-sufficiency, deliver substantial in-country value to drive economic growth and reinforce the country’s role as an international hub of excellence in sour gas operations,” Adnoc told Upstream last year.
The Hail & Ghasha project is expected to provide feedstock for Abu Dhabi’s gas export plants, with its ambition to emerge as a leading hydrogen producer.