ADNOC awards $510m contract to expand Shah Sour Gas plant capacity

State-owned company ADNOC announced the awarding of a $510m (Dhs1.87bn) engineering, procurement, and construction (EPC) contract to expand the capacity of its Shah Sour Gas Plant.

The EPC contract for the Optimum Shah Gas Expansion (OSGE) project was awarded by ADNOC Sour Gas (ASG) to Italy’s Saipem. Over 50 per cent of the award value will flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) programme.

The project is expected to be completed in 2023 and will increase the processing capacity of the plant by 13 per cent, from 1.28 to 1.45 billion standard cubic feet per day (SCFD). Shah, located 210 kilometers southwest of Abu Dhabi city, came on stream in 2015 and the OSGE project represents a cumulative expansion to 145 per cent of the plant’s original capacity.

The scope of the OSGE project includes associated off-sites and utilities necessary to integrate the new facilities with existing installations, including gas gathering facilities, main gas plant, product pipelines and the sulfur granulation plant. The plant modifications have been designed for integration with existing facilities with no impact on the safety or integrity of the plant while minimising impacts on production during construction, interfacing and commissioning, a statement said.

ASG, a joint venture between ADNOC and Occidental, adopts an integrated single-field approach that covers upstream, midstream, and downstream activities. It operates the Shah field and is the only company in the world that processes more than 1 billion SCFD of ultra-sour gas from a single gas plant which also produces approximately 5 per cent of the world’s granulated sulfur. Except for sulfur, all products from Shah are delivered to ADNOC group companies for further processing or distribution to domestic consumers. Granulated sulfur is transported from Shah by rail to Ruwais for export.

Yaser Saeed Almazrouei, ADNOC upstream executive director, said: “The Shah Gas Expansion Project is an excellent example of how ADNOC is growing its gas production at existing fields to deliver a more sustainable gas supply and support the UAE’s gas self-sufficiency objective. Importantly, the in-country value generated from the EPC contract award will help to stimulate the growth of the private sector and local economy as we navigate the post-Covid recovery and continue to meet the future energy needs of our nation.”

The scope of work of the OSGE project includes engineering, procurement, construction, pre-commissioning, commissioning, and startup of facilities to increase plant production capacity as well as the extension of the existing gas gathering network and new pad facilities.

Tayba Al Hashemi, CEO of ASG, added: “Shah’s expansion will optimise the plant as well as improve both capacity and higher-end product recoveries, further growing our contribution as a safe and reliable supplier of gas to ADNOC and the UAE. It enhances Shah’s position as a hub of sour operations expertise, developing the skills and experience of the next generation of Emirati professionals. Saipem was awarded this contract following a rigorous, competitive tender process.”

Last month, ADNOC awarded a $744m contract for the full field development of the Belbazem Offshore Block.

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