| 22 February 2024, Thursday |

Adnoc awards Italy’s Saipem $510 million contract to expand capacity at Shah gas plant

Italy’s Saipem has been awarded by Abu Dhabi National Oil Company a $510 million contract after a competitive tender process, to expand production capacity at the Shah sour gas plant, as the UAE looks to increase its output of gas by 2030.

The contract will increase gas processing capacity at the Shah gas plant by 13 percent to 1.45 billion cubic feet per day from 1.28 bcf/d by 2023 and supports Adnoc’s objective of enabling gas self-sufficiency for the UAE. The Shah gas plant meets 12 percent of the UAE’s total supply of natural gas.

The plant processes ultra sour gas, which refers to highly sulphurous fuel, which needs to be refined before use. The Shah gas plant processes 1 bcf/d of ultra sour gas and accounts for around 5 percent of the world’s granulated sulphur, which is a byproduct of the refining.

“Shah’s expansion will optimize the plant as well as enhance both capacity and higher-end product recoveries, further growing our contribution as a safe and reliable supplier of gas to Adnoc and the UAE,” said Tayba Al Hashemi, chief executive at Adnoc Sour Gas.

Adnoc Sour Gas, a subsidiary of the national oil company and a joint venture between Adnoc and US energy player Occidental,  covers upstream, midstream, and downstream activities. It operates the Shah field and is the only company in the world that processes more than 1 bcf per day of ultra-sour gas from a single gas plant, which also produces approximately 5 per cent of the world’s granulated sulfur.

The latest addition is a 145 per cent cumulative expansion of the plant, which became operational in 2015.

The UAE consumes around 7.4 bcf of gas per day largely to meet power demand, with the total share of imported fuel at 30 per cent, according to estimates by energy consultancy FGE.

The scope of the development work at the Shah gas plant includes engineering, procurement, construction, pre-commissioning, commissioning, and start-up of facilities to increase plant production capacity.

The Italian company will also extend existing gas gathering network and new pad facilities.

“This strategic Shah gas expansion project is an excellent example of how Adnoc is growing its gas production at existing fields to deliver more gas supply and support the UAE’s gas self-sufficiency objective,” Yaser Almazrouei, Adnoc’s upstream executive director, said.

Around 50 percent of the value of the contract awarded to Saipem will flow back to the UAE economy under Adnoc’s in-country value program.

  • The National News