ADNOC awards US$548m contract for Lower Zakum, in Abu Dhabi
Abu Dhabi National Oil Company (ADNOC) has announced that it has awarded a US$548m contract to build a new main gas line to National Petroleum Construction Company (NPCC) at its Lower Zakum field offshore of Abu Dhabi.
Engineering, procurement and construction (EPC) contract
In a statement, ADNOC said that the engineering, procurement and construction (EPC) contract was awarded after a competitive tender process. The contract will result in an increase of Lower Zakum’s field gas production capacity to 700m standard cubic feet per day (MMSCFD) from to 430m.
Furthermore, the new pipeline will cater for the increased volume of associated gas produced by Lower Zakum field as the field’s oil production capacity increases to 450,000 barrels of oil per day by 2025.
The award supports ADNOC’s plans to enable gas self-sufficiency for the United Arab Emirates (UAE) and cater for increasing global energy demand. Over 75% of the award value will flow back into the UAE economy under ADNOC's In-Country Value (ICV) program and job opportunities will be created for UAE Nationals by the contractor, providing them practical exposure in executing EPC contracts.
Driving competitive gas recovery in the energy sector
Yaser Saeed Almazrouei, ADNOC Upstream Executive Director, said: “This contract award will enable us to produce more gas as we increase production capacity from Lower Zakum field. This will support our integrated gas masterplan which is driving competitive gas recovery to enable gas self-sufficiency for the UAE and industrial growth, while also helping to meet the increasing global demand for energy.
“With over 75% in-country value resulting from the award, the project will further stimulate economic growth and create opportunities for the private sector, in line with the UAE Leadership’s wise directives.”
The project will be completed in 2025 and it will see the construction of a new subsea pipeline that will run 85 kilometres from Zakum West Super Complex to Das Island. It will also include provisions to construct, install and test a new platform at the super complex as well as a new gas receiving facility at Das Island.
Ahmad Saqer Al Suwaidi, ADNOC Offshore CEO, added: “Lower Zakum is a strategic asset for ADNOC and the UAE and working with our international partners, we will continue to responsibly unlock and maximise value from the field in line with ADNOC’s 2030 smart growth strategy.
“This award is an important part of the long-term development plan for the field and will help strengthen ADNOC’s position as a leading low-cost and low-carbon provider of energy for customers around the world.”
ADNOC’s gas masterplan links every part of the gas value chain to further unlock Abu Dhabi’s abundant gas reserves enabling domestic gas self-sufficiency, industrial growth, and diversification, as well as to meet growing global gas demand. Natural gas is playing an increasingly important role in the energy transition as both a feedstock and a fuel as it burns with significantly lower-carbon intensity than coal.
The awarding of the contract means that ADNOC Offshore and its strategic international partners have invested more than US$5bn in recent weeks in the long-term development of Abu Dhabi's offshore operations.
The awards included contracts worth more than US$3.4bn awarded to ADNOC Drilling to accelerate offshore growth activities and a US$1.1bn contract awarded to ADNOC Logistics and Services to enhance offshore operations.