GASCO Awards $415 Million EPC Contract for Gas Development to Technip

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Researched by Industrial Info Resources (Sugar Land, Texas)--Abu Dhabi Gas Industries Limited (GASCO) (Abu Dhabi, United Arab Emirates), the gas unit of state-owned Abu Dhabi National Oil Company (ADNOC) (Abu Dhabi), has awarded a gas development contract to Technip (OTC:TKPPY) (Paris, France) on a lump-sum turnkey basis. The engineering, procurement, construction (EPC) and commissioning contract, valued at about $415 million, is for GASCO's Asab 3 project. The Abu Dhabi office of Technip received the letter of intent earlier this week. Technip will begin the initial project work from its office in France and will continue from the project site once construction begins. GASCO is a joint venture between ADNOC (68%), Total SA (NYSE:TOT) (Paris) (15%), Royal Dutch Shell plc (NYSE:RDS) (The Hague, Netherlands) (15%) and Partex Oil and Gas (Holdings) Corporation (Lisbon, Portugal) (2%).

The Asab 3 project is scheduled to be completed by the third quarter of 2012, and all redundant facilities will be removed from the site by the second quarter of 2013. Under the terms of the contract, Technip must maximize the local content of the project in terms of services, materials and equipment. The project will create thousands of employment opportunities during the construction phase. In addition, United Arab Emirates nationals will get an opportunity to learn new technologies and enhance competence and expertise in technology and project management. The project fits into GASCO's plans to invest $25 billion in gas processing plants and pipelines in an effort to meet the increasing demand for gas.

GASCO's Asab natural gas liquid (NGL) extraction plants first compress the associated gas procured from the nearby facilities of oil producer Abu Dhabi Company for Onshore Oil Operations (ADCO) (Abu Dhabi). This is followed by cooling the compressed gas to ensure high NGL recovery. The gas is then shipped to GASCO's fractionation plant at Ruwais where it is fractionated to obtain ethane, propane, butane and paraffinic naphtha. The residual gas is compressed and sent back to the ADCO gas network. Abu Dhabi Polymers Company Limited (Borouge, United Arab Emirates) purchases the ethane, while the other products are shipped in tankers worldwide from GASCO's jetty in Ruwais. ADCO is a joint venture company formed by ADNOC (60%) and Abu Dhabi Petroleum Company (Abu Dhabi) (40%).

The target of the Asab 3 project is to process 150 million standard cubic feet per day of associated gas from the rich Sahil, Shah and Asab oilfields, located nearby. The project will add a new booster station to transport 450 million standard cubic feet per day of gas from ADCO's facilities. The existing Asab "0" plant will be expanded and will process the additional gas. The Asab "0" expansion project will include the addition of six new compressors and associated processing facilities. The compressors will be fitted with electrical drives to optimize energy efficiency. Power will be transported from the Asab 2 area, located about 10 kilometers away, via new 33-kilovolt overhead lines. A new substation will be set up to manage the power supply. A new conversion compressor, along with a 16-inch pipeline, will be provided between Asab "0," Asab 1 and 2 and the new project. This diversion capability between Asab "0" and Asab 1 and 2 will improve the gas processing flexibility of the Asab network. The Asab 2 project is nearing completion and is expected to be commissioned soon.

Asab 3 will ramp up the quantity of sales gas available to the residents of Abu Dhabi and will also increase the oil production capacity of the new ADCO facilities that are being developed. The residual gas from the NGL plants that is added to ADCO's network gas is composed mostly of methane, used as a fuel in the refining process. The availability of additional fuel will enhance the refining capacity of ADCO's facilities. The Asab 3 project's front end engineering and design (FEED) work was completed earlier this year with focus on the health, safety and environmental (HSE) aspects of the project to be in line with ADNOC's HSE Codes of Practice.

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