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

Highlights

Saipem wins contract to expand capacity by 13% to 1.45 bcf/d

Expansion project expected to be completed by 2023

ADNOC is working to reach gas self-sufficiency

Abu Dhabi National Oil Co. has awarded a $510 million contract to Italy's Saipem to expand the capacity of Shah sour gas plant as the UAE's biggest energy producer seeks gas self-sufficiency.

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ADNOC Sour Gas, a joint venture between the oil company and US energy major Occidental, awarded the engineering, procurement and construction contract for the expansion of the Shah gas field, which will be completed in 2023, ADNOC said in a statement June 15.

The contract will increase the capacity of the Shah gas plant by 13% to 1.45 bcf/d, it added. Shah, which lies 120 km southwest of Abu Dhabi city, became operational in 2015.

ADNOC Sour Gas processes more than 1 bcf/d of ultra-sour gas from a single gas plant, which also produces approximately 5% of the world's granulated sulfur. All products from the Shah plant are delivered to ADNOC companies for further processing or distribution to domestic consumers, while granulated sulfur is transported by rail to the industrial hub of Ruwais for export.

The seven-member UAE federation is developing several gas projects in various emirates as part of its self-sufficiency target.

Unconventional gas

In energy-rich Abu Dhabi, ADNOC is developing both conventional and unconventional resources to help meet its gas self-sufficiency goal.

In 2019, Abu Dhabi's former Supreme Petroleum Council announced that the emirate had 273 TCF of conventional gas and 160 TCF of unconventional gas resources.

ADNOC is boosting its gas output with the help of international oil companies.

In November, ADNOC and Total announced the delivery of first gas from the Ruwais Diyab Unconventional Gas Concession, a joint venture in which the French major has a 40% stake and the national oil producer holds the remaining stake. The concession aims to produce 1 bcf/d of gas before 2030.

Germany's Wintershall and Italy's Eni are working with ADNOC to develop the Ghasha ultra-sour gas concession which is expected to produce over 1.5 bcf/d by around 2025.

It also plans to move forward to develop the sour gas fields at Bab and Bu Hasa.