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ADNOC awards $510 mn contract to Saipem to expand Shah sour gas capacity

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The contract will increase the plant’s capacity by 13% to 1.45 bn cubic feet per day by 2023

ADNOC has awarded a $510 million Engineering, Procurement, and Construction (EPC) contract to Saipem, to expand the capacity of its Shah Sour Gas Plant, according to media reports. The expansion project aims to increase the plant’s capacity by 13 percent, from 1.28 billion cubic feet to 1.45 billion cubic feet per day by 2023. The Shah sour gas plant accounts for 12 percent of the UAE’s total supply of natural gas.

The plant processes ultra sour gas, which is highly sulphurous in nature and accounts for 5 percent of the world’s granulated sulphur, which is a byproduct of refining. The contract also supports ADNOC’s vision of making UAE gas self-sufficient and the growth in gas production, which is in line with ADNOC’s 2030 strategy.

The EPC contract was awarded to Italy’s Saipem after a competitive tender process, where over 50 percent of the funds will flow back into UAE’s economy, under the ADNOC’s In-Country Value (ICV) programme. This will further solidify ADNOC’s commitment to ensure that more economic value stays within the country even after it awards any contract.

Yaser Saeed Almazrouei, ADNOC Upstream Executive Director, told the media, “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 gas plant modifications are also designed for seamless integration, keeping in mind its existing facilities so that there is no compromise in the safety or integrity of the plant while minimising the effect on production during construction, interfacing and commissioning.

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