UAE’s ADNOC awards 10% stake in mega Ghasha gas project to Germany’s Wintershall

The Abu Dhabi government and the Abu Dhabi National Oil Company (ADNOC) has awarded a 10 per cent stake in its Ghasha ultra-sour gas mega project to Germany’s Wintershall Holding, it announced on Monday.

The Ghasha concession consists of the Hail, Ghasha, Dalma and other offshore fields including Nasr, SARB and Mubarraz and has a term of 40 years.

Wintershall, Germany’s largest crude oil and natural gas producer, will contribute 10 per cent of the capital for the multi-billion dollar project and operational development expenses, a statement said.

Earlier this month, ADNOC awarded a 25 per cent stake in the project to Italy’s Eni.

Read more: Abu Dhabi’s ADNOC awards 25% stake to Italy’s Eni in offshore gas concession

ADNOC had previously said it had earmarked 40 per cent of the Ghasha concession for foreign oil and gas companies.

The latest agreement marks the first time a German oil and gas company has been awarded a stake in an Abu Dhabi concession area and is part of ADNOC’s plan to expand and diversify its strategic partnership base, a statement said.

Mario Mehren, CEO of Wintershall – a wholly owned subsidiary of chemical company BASF said: “We have been working since 2010 on strengthening the Middle East region by investing here and developing it into another growth region for Wintershall.

“Wintershall is particularly qualified for the offshore operations in the Ghasha concession. We are experts in drilling technically demanding wells and developing fields efficiently. And we know precisely what counts in ecologically sensitive areas,” he added.

The Hail, Ghasha and Dalma ultra-sour gas project will tap into the Arab basin, which is estimated to hold multiple trillions of standard cubic feet of recoverable gas.

The project is expected to produce more than 1.5 billion cubic feet of gas per day when it comes on stream around the middle of the next decade.

The Ghasha concession is expected to produce enough gas to provide electricity to more than two million homes. Once complete, the project will also produce over 120,000 barrels of oil and high value condensate per day.

Over the project’s life-time, “substantial benefits will flow back into the UAE economy” including commercial opportunities for local businesses, the statement added.

Sultan Ahmed Al Jaber, UAE minister of state and ADNOC group CEO added: “In common with ADNOC, Wintershall has extensive experience of appraising and developing ultra-sour gas resources in technically complex fields. It is a partnership in which each company will benefit from the experience of the other as, together, we optimise costs and ensure we extract the maximum value from all the available gas resources.”

The latest announcement comes after the Supreme Petroleum Council approved ADNOC’s new gas strategy, which aims to help the UAE moves towards gas self-sufficiency and make the country a net gas exporter.

Also read: UAE’s ADNOC extends gas supply deal to 2040

“Development of the Ghasha concession area is a strategic priority for ADNOC,” said Al Jaber.

“The gas extracted from the concession area at commercial rates, will make a significant contribution to fulfilling our commitment to ensuring a sustainable and economic gas supply and achieving our objective of gas self-sufficiency for the UAE.”

Along with developing the Ghasha concession area, the company also plans to increase production from its Shah field to 1.5 billion cubic feet per day and move forward to develop the sour gas fields at Bab and Bu Hasa.

The company said it will also seek other sources of gas including Abu Dhabi’s gas caps and unconventional gas reserves, as well as new natural gas accumulations which will continue to be appraised and developed.

Read: Abu Dhabi’s ADNOC plans to increase oil production under $132bn plan