Abu Dhabi National Oil Co. (ADNOC) has cancelled two contracts previously awarded to Petrofac Ltd. subsidiary Petrofac Emirates LLC and a joint venture of Petrofac and Sapura Energy Bhd. to provide engineering, procurement, and construction (EPC) for ADNOC’s Dalma gas development project 90 km northwest of Abu Dhabi City, UAE, a key part of the Ghasha Concession portfolio of projects encompassing Hail, Ghasha, and Dalma ultra-sour gas fields in the Emirate of Abu Dhabi (OGJ Online, Aug. 15, 2017).
Upon receiving notice of termination of the contracts, Petrofac is now committed to working with ADNOC over the coming weeks to explore alternative options to deliver this project in a way that supports the operator’s strategic objectives within the current challenging environment, the service provider said on Apr. 16.
Awarded in February 2020, the two EPC contracts, which had a total combined value of more than $1.65 billion, were to cover EPC services—including novated long-lead items, transportation, offshore installation, and commissioning—for Dalma gas field development, as well as offshore packages at Arzanah island and surrounding offshore fields about 140 km off Abu Dhabi’s northwest coast (OGJ Online, Feb. 18, 2020).
As part of the first $1.065-billion, 33-month, lump-sum contract, Petrofac was to provide EPC services for gas processing installations at Arzanah island, including inlet facilities with gas processing and compression units, power generation units, utilities, and other associated infrastructure.
Under the second 30-month, lump-sum contract—valued at $591 million—the Petrofac-led JV with Sapura Energy was to deliver EPC services for three new wellhead platforms, removal and replacement of an existing topside, new pipelines, subsea umbilicals, composite, and fiberoptic cables.
Scheduled to be completed in 2022, work under both contracts was to enable the Dalma gas development project—which is central to ADNOC’s strategic objective of enabling the UAE’s gas self-sufficiency—to produce around 340 MMcfd of natural gas.
The Hail, Ghasha, and Dalma ultrasour gas development project was to tap into the Arab basin, which is estimated to hold multiple trillions of standard cubic feet of recoverable gas, according to ADNOC’s web site. ADNOC also expected more than 120,000 b/d of oil and condensates to be produced when the project was fully on stream.
ADNOC—which also previously let a contract to KBR Inc. to provide project management consultancy (PMC) services for the Ghasha Concession portfolio of projects—has yet to disclose details regarding its plans for the future of the Dalma project since the outbreak of the COVID-19 pandemic (OGJ Online, Feb. 3, 2020).
