UAE's ADNOC awards $510mln contract to Saipem to expand capacity at Shah Sour gas plant

Expansion project will increase plant capacity by 13% to 1.45bln cubic feet per day by 2023

ADNOC new building.

ADNOC new building.


ABU DHABI - The Abu Dhabi National Oil Company (ADNOC) today announced the award of a $510 million (AED1.87 billion) Engineering, Procurement, and Construction (EPC) contract to expand the capacity of its Shah Sour Gas Plant.

The investment supports ADNOC’s objective of enabling gas self-sufficiency for the UAE and underpins growth in gas production, in line with ADNOC’s 2030 strategy.

The EPC contract for the Optimum Shah Gas Expansion (OSGE) project was awarded by ADNOC Sour Gas – a subsidiary of ADNOC – to Italy’s Saipem after a competitive tender process. Over 50 percent of the award value will flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) programme, reinforcing ADNOC’s commitment to ensuring more economic value remains in the country from the contracts it awards.

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

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-19 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, said, "Shah’s expansion will optimize 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." The scope of the OSGE project includes all 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 seamless integration with existing facilities with no impact on the safety or integrity of the plant while minimizing impacts on production during construction, interfacing and commissioning.

ADNOC Sour Gas, 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% 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.

© Copyright Emirates News Agency (WAM) 2021.

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