Trio lands $5B contracts to support ADNOC’s gas output expansion

ADNOC Gas, a subsidiary of the UAE’s Abu Dhabi National Oil Company (ADNOC), has taken a final investment decision (FID) for the first phase of its project aiming to optimize existing gas assets while unlocking new gas streams. As part of this, the UAE giant has handed out engineering, procurement, and construction management (EPCM) contracts to the UK-based Wood and Petrofac and Dubai’s Kent.

The FID for the first stage of the Rich Gas Development (RGD) project is said to be the company’s largest-ever capital investment and the first of three for the project. The company intends to take FIDs on two additional phases of the project at Habshan and Ruwais, to boost production capacity and meet growing market demands.

Fatema Al Nuaimi, Chief Executive Officer of ADNOC Gas, said: “The FID and contract awards for the first phase of the Rich Gas Development project mark a significant milestone in ADNOC Gas’ strategy to deliver +40% EBITDA growth between 2023 and 2029. 

“This strategic investment is expected to deliver significant new value for our shareholders and enable continued sustainable growth for the company, our employees, and the UAE.”

According to ADNOC, the RGD project will enable the development of new gas reservoirs, which are key to boosting liquid gas exports, supporting gas self-sufficiency in the UAE, and providing essential feedstock to the country’s growing petrochemical industry. 

Forming part of ADNOC Gas’ long-term strategy focused on growth and future-proofing its business, the RGD project is said to align with the company’s vision to deliver what it considers important growth initiatives between 2025 and 2029.

Additionally, the UAE player sees the project as a reflection of its commitment to enhancing in-country value. Hundreds of new, field-based technical positions are planned to be created within it by 2029, further contributing to the UAE’s economic growth.

ADNOC Gas awarded $5 billion in EPCM contracts to expand key processing units, aiming to increase output and improve operational efficiency across four facilities. Three of these are located onshore: Asab, Buhasa, and Habshan, while the Das Island liquefaction facility is offshore. 

Contracts have been awarded in three tranches for this phase. The first and the biggest one, valued at $2.8 billion, went to Wood to deliver an EPCM package for the long-term gas processing facilities at the UAE’s Habshan facility. 

With its five plants, 14 processing trains, and a capacity of 6.1 billion standard cubic feet of gas per day (bcfd), the Habshan complex is said to be one of the largest in the world. Fed by gas from ADNOC’s onshore and offshore production operations, a mixture of sales gas, NGLs, condensate, and sulfur is produced here.

Under the new contract, Wood’s scope includes the delivery of what it says are substantial upgrades and debottlenecking solutions to the existing Habshan and Habshan 5 gas processing mega-complexes and pipelines. This includes brownfield modifications and the installation of new facilities.

Wood’s CEO, Ken Gilmartin, noted: “ADNOC Gas’ RGD programme is pivotal to the UAE’s energy security strategy and broader economy. We’re proud to be at the heart of such a significant initiative. 

“Wood gained extensive knowledge of Habshan delivering the front-end engineering design and we will deliver the EPCm phase while the facilities remain fully operational in order to sustain critical gas supply.”

Over 500 Wood engineering, project management, and commissioning specialists based in Abu Dhabi are set to take part in the project, with support from the company’s global engineering hubs. This scope is due to be completed by the end of 2027.

The second contract for providing EPCM services went to Petrofac. Valued at $1.2 billion, it entails the expansion of gas production facilities on Das Island.

Located 160 kilometers north-west of mainland UAE, the Das Island facility has been operational since 1977, and is the third longest LNG operation still in production globally. With a liquefaction capacity of six million metric tons per annum (mmtpa), it is described by Petrofac as a key component of the UAE’s LNG export strategy.

Under the contract, the UK player will provide EPCM services and oversee procurement and construction contracts to build a new inlet facility, two new gas dehydration and compression trains, each with a capacity of 420 million standard cubic feet per day (mmscfd), and associated infrastructure. 

The company will also upgrade existing facilities to increase the site’s capacity for collecting and transporting raw natural gas. This is expected to increase gas processing capacity to meet the rising customer demand.

Petrofac’s Group Chief Executive, Tareq Kawash, said: “We are delighted to have been entrusted by ADNOC Gas, one of our longest-standing customers, to undertake this contract in our home market of the UAE. We look forward to working together to safely and sustainably increase the gas processing capacity at Das Island.”

The third contract, valued at $1.1 billion, went to Kent. As part of it, the Dubai-based company is set to work at the Asab and Buhasa facilities.

Petrofac previously inked a $335 million deal with ADNOC to develop the two gas compressor trains, associated utilities, and power systems for the Habshan Complex. The firm was one of the several that won contracts for work on transmission pipelines and related projects to connect the UAE company’s Ruwais LNG project under construction with Habshan.