Contracts to Go as Abu Dhabi Kicks in World Scale Project Drive in Oil and Gas at Habshan

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Researched by Industrialinfo.com (industrial Information Resources Incorporated; Houston, Texas). The Abu Dhabi National Oil Company (Adnoc) is developing a number of major projects, in series, in order to keep its place as a key global energy player. Concurrent with pursuing projects to increase crude oil production from 1 million to 1.4 million bpd by 2006, it is bringing on gas production projects to parallel the increases in oil.

Production at the Habshan Gas Complex will be increased to 4.5 million cubic meters per day (cmpd) by 2007, and under Phase III of the Onshore Gas Development project, a new processing plant with a capacity of 1.2 cmpd will be constructed. Gasco (Abu Dhabi Gas Industries) and Takreer (Abu Dhabi Oil Refining Company) will be active in the project, and Gasco will increase production of ethane and ethylene to match production with new investments in petrochemicals.

Takreer is moving in 2004 on major projects including inter-refinery pipelines, motivated by lower life cycle costs and environmental safety considerations. The project will eliminate the need to transfer products between the two refineries through marine tanker operations. Supplies to Abu Dhabi International Airport and Al Ain City will be facilitated, and new pipelines will be introduced to transport natural gas and condensates to Ruwais.

In July, the company said that the front end engineering and design (FEED) for the pipeline project had been completed, and that the EPC contract would be awarded in the first quarter of 2005, with an implementation schedule of 31 months for the handover of facilities to Takreer in the third quarter of 2007. After an extensive evaluation process bids have been invited from Eastern Bechtel (USA/UK), Howe Baker Eastern (UK), Clough Engineering (Australia), Dodsal (India), UAE National Petroleum Company, Techint (Italy/South America), Technip (Germany), and Wilbros Middle East (USA).

The company is also working on a new sulfur recovery unit, which is scheduled for completion in the third quarter of 2005, after which the existing sulfur unit will be demolished by the first quarter of 2006. Planned power generation enhancements have been running parallel to production project development.

Contracts now running on the complex development include the one awarded to Technip-Coflexip (NYSE:TKP, EURONEXT:TEC) (Paris, France), in association with Abu Dhabi's NPCC for the North East Abu Dhabi (NEAD) Phase 1 project. This $566 million contract announced in May covers a gathering system connecting all the wells through a manifolds and flowlines network, two central processing plants to remove salt and water and separate gas out of oil, interconnections between the gathering system, and the two central processing plants, as well as pipelines to export oil to Bab. The plants will be monitored by a Distributed Control system and a telecom system based on the latest technologies.

At the beginning of 2004, Fluor (NYSE:FLR) (Aliso Viejo, California) was awarded a $10 million contract for the Habshan Gas Complex expansion FEED contract. The work, executed from the company's U.K. office, should be completed by this September and covers the expansion requirements for the construction of a 350 mcfd train at Habshan, installation of a low booster compressor, a gas pipeline to Bab, a new acid removal unit, a new NGL unit, a high pressure NGL line from the gas fields, and a re-injection compressor unit at Habshan, to supply gas for the re-injection to the Bab field.

Other leading contractors are in the field for the serial contract kill on this dynamic and developing complex. One wonders at the apparent feeling of driving confidence which comes out of the forward plan project plans, upstream and downstream, from UAE states, when some of the good ole boys in adjacent territories appear to be standing on the burning deck.