Wednesday, Apr 14, 2010
DUBAI (Zawya Dow Jones)--Spain's Tecnicas Reunidas SA(TRE.MC) and Italy's Saipem SpA (SPM.MI) are among companies well placed to win key contracts on the estimated $12 billion Shah sour gas field development in Abu Dhabi, people familiar with the situation say.
Tecnicas Reunidas has submitted the lowest offer at about $475 million for the engineering, procurement and construction, or EPC, contract to implement package one on the Shah program, covering construction of a gas gathering system at the onshore Shah field, the industry officials told Zawya Dow Jones.
Saipem has emerged as the low bidder on the project's second package, for the construction of gas processing facilities, at about $1.9 billion, the officials said. The Italian firm also submitted the lowest price for package three, covering sulfur recovery units, at about $1.5 billion, according to the officials.
The EPC contracts are expected to be awarded in the second quarter, one Abu Dhabi-based official said.
Tecnicas Reunidas declined to comment on its offer as bids are still being evaluated by the client, Abu Dhabi Gas Development Co., the joint venture set up by ConocoPhillips (COP) and Abu Dhabi National Oil Co., or Adnoc, to implement the project. Saipem didn't respond to emailed questions from Zawya Dow Jones.
Abu Dhabi Gas Development said it is "not in a position yet to advise any information about the tendering process before awards to successful bidders," when contacted by Zawya Dow Jones.
Other companies pursuing work on Shah include JGC Corp. (1963.TO), GS Engineering & Construction Corp. (006360.SE), Hyundai Engineering & Construction Co. (000720.SE), SK Engineering & Construction, Petrofac (PFC.LN), Technip S.A. (TEC.FR) and Techint, according to Zawya.com's Projects Monitor service.
The Shah development is crucial to help Abu Dhabi, the largest of seven emirates that make up the United Arab Emirates, meet gas demand, which has surged as the government builds gas-fired power stations and desalination plants, and develops industries such as petrochemicals that use gas in the production process. The project aims at producing 1 billion cubic feet a day of sour gas.
ConocoPhillips and Adnoc are also expected to announce soon plans for a rail line to transport sulfur from the Shah field to Ruwais on the Persian Gulf coast.
-By Tahani Karrar-Lewsley, Dow Jones Newswires; +9714 446-1692; Tahani.Karrar@dowjones.com
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(END) Dow Jones Newswires
14-04-10 0534GMT
