meed-logo

line1 line2 line3
SIGN IN / REGISTER

Adnoc Gas awards $3.6bn Project Meram contract

9 August 2023

Adnoc Gas has awarded a $3.6bn contract to a consortium of Abu Dhabi’s National Petroleum Construction Company (NPCC) and Spanish contractor Tecnicas Reunidas for its Maximise Ethane Recovery & Monetisation (Meram) project.

MEED recently named the consortium of NPCC and Tecnicas Reunidas as the frontrunner to win the main engineering, procurement and construction (EPC) contract for Project Meram.

The scope of work on the contract includes commissioning new gas processing facilities to enable an optimised supply to the Ruwais industrial complex, Adnoc said in a statement on 9 August.

The strategic Meram project aims to achieve dual objectives, Adnoc stated. The first goal is to increase ethane extraction, by 35 to 40 per cent, from Adnoc Gas’s existing onshore facilities in the Habshan gas processing complex by constructing new gas processing facilities.

The second goal is to unlock further value from existing feedstock and deliver it to Ruwais via a 120-kilometre natural gas liquids (NGL) pipeline.

“Over 70 per cent of the award value will flow back into the UAE’s economy under Adnoc’s In-Country Value (ICV) programme, supporting local economic growth and diversification,” Adnoc added.

Project Meram

Adnoc Gas Processing, the predecessor of Adnoc Gas, initiated Project Meram. It awarded Australia-headquartered consultancy Worley the feed contract for the project in August 2021. Worley has also performed the pre-feed works.

One of the primary objectives of the project is to supply additional ethane output in the form of feedstock to Abu Dhabi Polymers Company (Borouge) for its under-construction Borouge 4 petrochemicals complex in Ruwais, as well as to petrochemicals derivative plants in the upcoming Taziz chemicals complex.

Adnoc Gas started the prequalification round for the EPC tendering process for Meram in the third quarter of last year. Contractors submitted expressions of interest to participate in the main contract bidding exercise in September last year, as MEED previously reported.

Adnoc Gas issued the main EPC tender for Meram in February. Bidders submitted technical bids on 6 March. MEED reported that after receiving technical bids for Meram, Adnoc Gas approached bidders with clarifications and additional queries on their proposals, before calling for commercial offers.

Adnoc Gas received commercial bids from contractors for Meram by 21 June.

Following the evaluation of commercial proposals and further negotiations between Adnoc Gas and the contractors, the consortium of NPCC and Tecnicas Reunidas emerged as the lowest bidder for the project, according to sources.

Besides the winning consortium, UK-headquartered Petrofac and China’s Sinopec Engineering are the other contractors that bid for Meram.

Adnoc Gas business

Adnoc Group announced the creation of Adnoc Gas through the merger of its subsidiaries Adnoc Gas Processing and Adnoc LNG in November 2022.

Adnoc Gas began operating as a commercial entity from 1 January this year. The company’s executive leadership team comprises Ahmed Mohamed Alebri as acting CEO, Peter Van Driel as chief financial officer and Mohamed al-Hashemi as chief operating officer.

Adnoc Group, the parent organisation, completed an initial public offering of Adnoc Gas, with shares of the new company starting to trade on the Abu Dhabi Securities Exchange (ADX) from 13 March.

The consolidation of Adnoc’s gas processing and liquefied natural gas (LNG) operations into Adnoc Gas has created one of the world’s largest gas processing entities with a processing capacity of about 10 billion standard cubic feet of gas a day across eight onshore and offshore sites, and a pipeline network of over 3,250 kilometres.

“Adnoc Gas expects to benefit from projected robust, long-term demand globally through its tangible growth opportunities, in view of the projected rise in gas demand in the next 25-30 years,” Adnoc Group previously said.

“Adnoc Gas is advantageously located in a strategically situated corridor with easy access to the largest and growing gas markets, which offers optionality to ship products both to Asia and Europe with sales in the spot market enabling selection of an optimal supply destination,” the parent entity claims.

Adnoc Gas recently announced its financial results for the second quarter and first half of 2023, reporting a year-on-year decline in profits in both periods due to lower natural gas prices.

The company – which has access to the world’s seventh-largest gas reserves – said it is progressing with major projects to expand its business.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11063153/main.png
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Neom cancels $1.5bn desalination plant project

    17 May 2024

     

    The joint development agreement (JDA) for a project to develop a zero liquid discharge plant in Saudi Arabia's Neom has expired and has not been renewed, leading to the cancellation of the project, sources familiar with the scheme tell MEED.

    A consortium of Neom subsidiary Enowa, Japan’s Itochu and France’s Veolia signed a JDA for the scheme in December 2022, approximately six months after they signed a memorandum of understanding to develop the renewable-energy powered advanced seawater reverse osmosis project in Oxagon, Neom’s industrial cluster.

    The proposed plant was to deliver up to 2 million cubic metres a day (cm/d) of desalinated water to Neom, equivalent to about 30% of the gigaproject's expected total water demand once complete.

    The entire facility was understood to require a total investment of $1.5bn-$2bn.

    The developer team initially indicated that the target commercial operation date for the project's first phase, understood to have a capacity of 500,000 cm/d, was 2025. 

    In a statement sent to MEED, Enowa said Neom's water requirements have evolved over the last year "leading us to adopt a stepwise approach to expanding capacity".

    It continued: "As a result, we've decided to discontinue our joint development agreement (JDA) for this project. This decision was made after open communication and extensive discussions to ensure mutual understanding and commitment.

    "Our dedication to delivering sustainable and innovative solutions remains unchanged, and we value our collaboration with international partners as we adjust our approach to best serve Neom's long-term goals."

    Advanced technology

    In addition to using 100% renewable energy, the proposed state-of-the-art desalination plant intended to use advanced membrane technology to produce separate brine streams, enabling the production of brine-derived products to be developed and monetised downstream.

    The plan involved converting brine, the main waste output of desalination, into industrial materials to be used locally or exported internationally.

    At the time, Enowa said brine generated from the desalination plant would be treated to feed industries utilising high-purity industrial salt, bromine, boron, potassium, gypsum, magnesium and rare metal feedstocks.

    Neom appointed Japan’s Sumitomo Mitsui Banking Corporation as financial adviser for the project. UK-based DLA Piper was the legal adviser and Canada’s WSP was the technical adviser.

    MEED's April 2024 special report on Saudi Arabia includes:

    > GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
    > BANKING: Saudi lenders gear up for corporate growth
    > UPSTREAM: Aramco spending drawdown to jolt oil projects
    > DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
    > POWER: Riyadh to sustain power spending
    > WATER: Growth inevitable for the Saudi water sector
    > CONSTRUCTION: Saudi gigaprojects propel construction sector
    > TRANSPORT: Saudi Arabia’s transport sector offers prospects

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11780001/main.jpg
    Jennifer Aguinaldo
  • Neom receives bids for schools PPP

    15 May 2024

     

    Saudi Arabian gigaprojects developer Neom has received bids for a contract to develop and operate two schools in the SR1.5tn ($500bn) development.

    According to a source close to the project, around a dozen local companies submitted proposals for the scheme in late April or early May.

    The project is being procured on a build, own, operate and transfer (BOOT) basis.

    It is understood Riyadh-based Banque Saudi Fransi Capital is the client's financial adviser for the project.

    Related read: PPP offers budget and efficiency routes

    Neom recently invited companies to bid for a contract to develop four hotels at Oxagon, the development's industrial cluster.

    Neom expects to receive bids for the contract in July. The hotels, understood to have a total of 1,200 keys, will also be developed using a BOOT model.

    Most of Saudi Arabia's gigaprojects have been shifting the physical and social infrastructure components of their developments, in addition to their utility infrastructures, to public-private partnership (PPP) models due to budgetary constraints and a need for a more efficient approach to procuring and operating these assets long term.

    MEED's April 2024 special report on Saudi Arabia includes:

    > GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
    > BANKING: Saudi lenders gear up for corporate growth
    > UPSTREAM: Aramco spending drawdown to jolt oil projects
    > DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
    > POWER: Riyadh to sustain power spending
    > WATER: Growth inevitable for the Saudi water sector
    > CONSTRUCTION: Saudi gigaprojects propel construction sector
    > TRANSPORT: Saudi Arabia’s transport sector offers prospects

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11773702/main.jpg
    Jennifer Aguinaldo
  • Ewec plans new independent water project

    15 May 2024

     

    Abu Dhabi-based offtaker Emirates Water & Electricity Company (Ewec) is considering procuring a new independent water project (IWP), according to industry sources.

    The planned seawater reverse osmosis (SWRO) facility is expected to have a capacity of 90 million imperial gallons a day (MIGD), equivalent to about 409,000 cubic metres a day (cm/d).

    Sources have told MEED that the proposed location is either in Al Nouf or Taweelah in Abu Dhabi.

    A facility in Al Nouf will require a long pipeline that will connect the plant to Abu Dhabi, and will likely involve the participation of the Abu Dhabi Transmission & Despatch Company (Transco), according to one of the sources.

    It is understood that Ewec could seek interest from developers for the new IWP by the end of the year. 

    This development follows the revision of the scope and capacity of Abu Dhabi's fourth IWP scheme, which is currently in the tendering stage.

    The Saadiyat Island IWP will have a capacity of 60 MIGD.

    When it was tendered in July 2023, the original scheme – called the Abu Dhabi Islands IWP – comprised two SWRO plants each with a capacity of 50 MIGD, to be located on the Saadiyat and Hudayriat islands in Abu Dhabi.

    The current tender closing date for the Saadiyat Island IWP project is 29 June.

    "They need this additional planned capacity [in Al Nouf or Taweelah] since the other scheme in Hudayriat has been cancelled," the source added.

    Ewec previously said these projects are important to Abu Dhabi’s water security due to their proximity to the load centre of the Abu Dhabi islands, as well as the scheduled decommissioning in 2028 of the integrated power and water desalination plant at Sas Nakhl.

    As in previously tendered IWPs, the successful developer or consortium will own up to 40% of a special-purpose vehicle that will implement these projects, while the remaining equity will be primarily held indirectly by the Abu Dhabi government.

    Awarded contracts 2023

    Ewec awarded the contracts for two IWPs last year. Ewec, Abu Dhabi National Energy Company (Taqa) and France’s Engie signed the water purchase agreement for the Mirfa 2 IWP project in February 2023. They reached financial close for the project, which will have a capacity of 120 MIGD, two months later.

    Taqa, Ewec and South Korea’s GS Inima reached financial close on the $444m Shuweihat 4 SWRO IWP in December. Located within the Shuweihat power and water complex, the facility will supply up to 70 MIGD of potable water. Commercial operations are expected to commence in the second quarter of 2026.

    MEED's April 2024 special report on the UAE includes:

    > COMMENT: UAE rides high on non-oil boom
    > GVT & ECONOMY: Non-oil activity underpins UAE economy
    > BANKING: UAE banks seize the moment
    > UPSTREAM: Adnoc oil and gas project spending sees steep uptick
    > DOWNSTREAM: UAE builds its downstream and chemical sectors
    > POWER: UAE marks successful power project deliveries
    > WATER: Dubai tunnels project dominates UAE pipeline
    > DUBAI CONSTRUCTION: Dubai real estate boosts construction sector
    > ABU DHABI CONSTRUCTION: Abu Dhabi makes major construction investments

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11772504/main2450.gif
    Jennifer Aguinaldo
  • Saudi Arabia expands PPP pipeline

    14 May 2024

     

    Register for MEED’s guest programme 

    Saudi Arabia’s National Centre for Privatisation & PPP (NCP) has seen significant progress in its public-private partnership (PPP) programme in the past year, according to Salman Badr, vice-president of the state PPP procuring authority.

    Speaking at the MEED Mena Construction Summit in Riyadh, Badr said that NCP has a “healthy pipeline” of over 200 approved projects in different stages of development. 

    He noted that another 300 projects are currently under review.

    It is understood that the pipeline includes more than 180 schools, following the award of contracts to develop and operate 60 schools each in Jeddah and Medina in 2020 and 2022.

    “New sectors like healthcare and education have been opened up for public-private partnerships beyond the traditional water and power sectors,” said Badr.

    The kingdom is understood to have awarded more than 60 PPP contracts since 2017, when NCP was formed.

    Badr said private sector participation has “allowed the government to deliver infrastructure projects much more efficiently”. 

    Recently completed projects include the kingdom’s first hospital PPP project in Medina. 

    In addition to healthcare and school facilities, NCP’s pipeline includes airports, seaports and roads, catering to Saudi Arabia’s growing infrastructure needs as the population and economy expand.

    MEED’s April 2024 special report on Saudi Arabia includes:

    > GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
    > BANKING: Saudi lenders gear up for corporate growth
    > UPSTREAM: Aramco spending drawdown to jolt oil projects
    > DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
    > POWER: Riyadh to sustain power spending
    > WATER: Growth inevitable for the Saudi water sector
    > CONSTRUCTION: Saudi gigaprojects propel construction sector
    > TRANSPORT: Saudi Arabia’s transport sector offers prospects

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11768175/main.jpg
    Sarah Rizvi
  • Rua Al Madinah seeks construction partners

    14 May 2024

    Register for MEED’s guest programme 

    Saudi Arabia’s Rua Al Madinah, the Public Investment Fund (PIF) subsidiary tasked with Medina’s tourism and cultural development, has revealed that construction work is under way on the main tunnel that will take all incoming traffic towards the Harem area. 

    Extensive works are also ongoing to redevelop the airport road and modernise the city’s wider transportation network. 

    “There are significant opportunities for contractors and partners,” said Abdulsalem Alharbi, projects delivery director, Rua Al Madinah, at the MEED Giga Projects event in Riyadh on 13 May. 

    “We are looking for capable service providers and strategic partners to support the large-scale infrastructure and construction works.”

    Alharbi said five packages of residential towers – comprising over 120 towers in total – are currently in various stages of design and tender. 

    The superblock 5 package includes 18 towers and is already on the market, while superblock 4, involving 19 towers, is in the design phase.

    Packages District 9 and District 10, consisting of 35 towers and 46 towers, respectively, are seeking partners to take on development roles. 

    Alharbi also highlighted several investment opportunities being developed to support the growing tourism sector, including a central kitchen, cold storage warehouse, commercial laundry and staff accommodation facilities.

    “This represents a major chance for local and international companies to participate in the redevelopment of Medina,” he added.

    Project background

    Crown Prince Mohammed Bin Salman Bin Abdulaziz Al Saud inaugurated the infrastructure works and unveiled the masterplan for the Rua Al Madinah development in August 2022.

    Before this, US-based Hill International was awarded a contract in 2021 for the project management of road works at the Madinah Central Area (MCA).

    In June 2022, a local media report cited China Railway 18th Bureau as having won a contract to build the Medina tunnel. 

    The tunnel, valued at $970m, was expected to be completed within 42 months. The work includes building the AH tunnel, the Ali Bin Abi Talib tunnel, the airport tunnel and related projects, including a pedestrian bridge.

    Rua Al Madinah Holding Company CEO Ahmed Al Juhani told MEED in February that construction work on the Ali Bin Abi Talib road has been completed, making it the first tunnel to be finished as part of the Rua Al Madinah project. 

    In February 2023, US-based Parsons won a $15m contract to provide construction project management consultancy and contract administration services (PMCM) for the project. The US consultancy firm will manage the main infrastructure works, including the tunnel, road and utility works.

    MEED’s April 2024 special report on Saudi Arabia includes:

    > GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
    > BANKING: Saudi lenders gear up for corporate growth
    > UPSTREAM: Aramco spending drawdown to jolt oil projects
    > DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
    > POWER: Riyadh to sustain power spending
    > WATER: Growth inevitable for the Saudi water sector
    > CONSTRUCTION: Saudi gigaprojects propel construction sector
    > TRANSPORT: Saudi Arabia’s transport sector offers prospects

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11766934/main.jpg
    Sarah Rizvi