Friday, Jul 17, 2009
Gulf News
Abu Dhabi: The UAE's state-owned Abu Dhabi National Oil Company (Adnoc) is investing in the next boom in energy prices which will also boost the domestic economy, said experts commenting on Abu Dhabi Gas Industries Ltd's (Gasco) award of contracts worth a total of Dh34 billion late on Wednesday for major gas projects in the emirate.
The contracts are for engineering, procurement, construction and commissioning (EPC) works for integrated gas systems projects at the Ruwais and Habshan gas plants.
"Oil and gas production is a cyclical industry. Adnoc is looking at the future and they are going to serve demand as and when it increases," Dalton Garis, associate professor of Economics and Petroleum Market Behaviour at the Petroleum Institute in Abu Dhabi told Gulf News.
"The gas prices are currently at around $3.7 (Dh13.6) per million British Thermal Units (MBTUs), down from a peak of $13 per MBTU. But the prices will go eventually higher again," Garis added.
Mohammad Amerah, an Abu Dhabi-based economist said the award of contracts by Gasco at a time when the entire world is facing recessionary pressures, will have a "multiplier effect on the UAE's domestic economy."
"The companies that have been awarded the contracts will recruit people, they will award sub-contracts to smaller companies to implement the projects which would spur domestic demand," he added.
Gasco awarded a Dh17.3 billion deal for the construction of a a gas processing plant to a consortium of Japan's JGC Corp and Italy's Maire Tecnimont, it said in a statement.
South Korea's Hyundai Engineering and Construction won a $1.7 billion deal for facilities at the Habshan 5 gas complex.
Gasco also awarded a $2.1 billion natural gas facility at the Ruwais plant to a consortium of Petrofac and South Korea's GS Construction and Engineering, the statement said.
US firm CB&I won a contract worth $533 million for propane, butane and pentane storage facilities.
As many as 18 companies were competing individually, or in the form of consortiums to win the Gasco contracts.
The awarded projects are expected to be completed by the third quarter of 2013, Gasco said. The letters of award were issued to the successful companies on Wednesday.
Gasco is 68 per cent owned by Adnoc, with the rest held by Royal Dutch Shell, Total and Partex.
By Himendra Mohan Kumar, Staff Reporter
Gulf News 2009. All rights reserved.
