Abu Dhabi’s ADNOC awards Dhs5bn contract in Ghasha concession

Abu Dhabi National Oil Company (ADNOC) has awarded a Dhs5bn ($1.36bn) dredging, land reclamation and marine construction contract to build multiple artificial islands in the first phase of development of the Ghasha Concession

The contract has been awarded to the UAE’s National Marine Dredging Company (NMDC).

The Ghasha Concession consists of the Hail, Ghasha, Dalma, Nasr and Mubarraz offshore sour gas fields.

Under the terms of the contract, NMDC will construct 10 new artificial islands and two causeways, as well as expand an existing island, Al Ghaf.

The project is expected to take 38 months to complete and will provide the infrastructure required to further develop, drill and produce gas from the sour gas fields in the Ghasha Concession.

At peak construction, the project is expected to employ over 3,500 people, a statement said.

The names of the new islands in the Ghasha Concession are Ghanem, Sawalem, Chananiz, Mudaifena, Reeah, Seebeh, Seemeh, Shalhah, Jzool and Duroob. They were drawn from pearl diving sites in the area.

As part of the selection criteria for the contract, ADNOC said it considered the extent to which bidders would maximize ‘in-country value’ in the delivery of the project.

The successful bid by NMDC prioritised UAE sources for materials, as well as the use of mostly local suppliers, manufacturers and workforce, resulting in a total local spend of over Dhs3.62bn(almost $1bn). NMDC will also work with international partners to deliver the project.

ADNOC also said it has worked in partnership with the Environment Agency-Abu Dhabi (EAD) to ensure that the oil and gas development project, including artificial islands, is sustainable – both for the environment and the people.

This included conducting one of the largest marine environmental baseline surveys in the UAE’s history in order to assess the marine life in the area and understand any potential impact.

“Artificial islands provide significant cost and environmental benefits, particularly in shallow water, by enabling the use of lower-cost land-drilling rigs instead of high-cost offshore jack-up drilling rigs,” ADNOC said.

They also provide greater flexibility for extended reach drilling when compared to offshore rigs.

“The use of artificial islands will also eliminate the need to dredge over 100 locations for wells and provide additional habitats for marine life,” it added.

ADNOC developed four artificial islands for the Upper Zakum expansion project – the second-largest offshore oil field and the fourth-largest oilfield in the world.

ADNOC group CEO Sultan Ahmed Al Jaber said: “This award accelerates the development of the Hail, Ghasha and Dalma sour gas offshore mega-project, which is an integral part of ADNOC’s 2030 smart growth strategy.

“As one of the world’s largest sour gas projects it will make a significant contribution to the UAE’s objective to become gas self-sufficient and transition to a potential net gas exporter.”

The Ghasha concession, which has a 40-year term, is expected to generate 1.5 billion cubic feet of gas per day when it comes online in the middle of the next decade.

Once complete it will also produce 120,000 barrels of oil and high-value condensates per day.

ADNOC recently awarded stakes in the Ghasha Concession to Italy’s Eni (25 per cent), Germany’s Wintershall (10 per cent) and Austria’s OMV (5 per cent).

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