meed-logo

line1 line2 line3
SIGN IN / REGISTER

Hail and Ghasha galvanises UAE upstream market

12 October 2023

This package on the UAE’s upstream sector also includes: 

> Adnoc seeks commercial bids for Upper Zakum
> Adnoc Onshore awards Sahil field upgrade contract
> Dubai-owned Dragon Oil to boost production in Egypt and Iraq
> Oil and gas players at Adipec strive for net-zero goals
> Adnoc awards $17bn EPC contracts for Hail and Ghasha
> Dana Gas makes changes to leadership

 

The UAE has made a giant leap towards becoming self-sufficient in natural gas production with Abu Dhabi National Oil Company's (Adnoc's) final investment decision on the Hail and Ghasha offshore sour gas project.

Adnoc and its partners in the Ghasha concession awarded contracts worth $16.94bn in early October for engineering, procurement and construction (EPC) works on the Hail and Ghasha project.

The investment represents the largest-ever capital expenditure (capex) on an oil and gas project in the UAE. As such, it will have a galvanising, trickle-down effect on the UAE oil and gas supply chain.

Hail and Ghasha programme

The Hail and Ghasha fields are part of Abu Dhabi’s Ghasha concession, which is expected to produce more than 1.5 billion cubic feet a day (cf/d) of gas before the end of this decade.

Adnoc holds the majority 55 per cent stake in the Ghasha concession. The other stakeholders are Italian energy major Eni with 25 per cent, Germany’s Wintershall Dea with 10 per cent, and Austria’s OMV and Russia’s Lukoil, each with 5 per cent.

A consortium of Abu Dhabi’s National Petroleum Construction Company (NPCC) and Italian contractor Saipem was awarded the project's offshore engineering, procurement and construction (EPC) package. Its value is $8.2bn, with Saipem declaring its share to be worth $4.1bn.

The scope of work broadly involves the EPC of offshore facilities, including facilities on artificial islands and subsea pipelines.

Italy-headquartered Tecnimont was awarded the onshore EPC contract. The $8.74bn contract relates to the EPC of onshore facilities, including carbon dioxide (CO2) and sulphur recovery and handling.

The Hail and Ghasha project was initiated by Adnoc in 2018, with at least three EPC tendering rounds since. Its size and scope made it a vastly strategic proposition, hence shelving the gas production programme was not an option. 

Through achieving the FID and awarding close to $17bn-worth of EPC contracts, Adnoc and its Ghasha concession partners have demonstrated the project's importance in ensuring the UAE is self-sufficient in gas by 2030.

NEWS FROM ADIPEC:
> Adnoc doubles 2030 carbon capture target
> Adnoc Gas awards $615m carbon capture contract
> Adnoc and Oxy to study direct air capture project
> Firms bid for Abu Dhabi airport tank farms project
> Sharjah and Ras al-Khaimah sign gas storage deal
Oil production push

Adnoc is also accelerating projects deemed vital to reaching its goal of 5 million barrels a day (b/d) of oil production potential by 2027, a target that has been brought forward from 2030.

Raising output from Abu Dhabi’s offshore oil fields is necessary for Adnoc to increase its overall crude production capacity. With this in mind, the Abu Dhabi energy giant has committed capex to key projects to raise output from the Upper Zakum and Lower Zakum offshore hydrocarbon concessions.

Through the UZ1000 project, Adnoc Group subsidiary Adnoc Offshore aims to grow oil production from Upper Zakum to 1.2 million b/d.

The main work scope involves the EPC of multiple surface facilities and plants at the Upper Zakum offshore development’s four main artificial islands of Al-Ghallan, Umm al-Anbar, Ettouk and Asseifiya – also known as Central Island, West Island, North Island and South Island, respectively.

Contractors submitted technical bids for EPC works on the Upper Zakum oil production increment project by 5 June. Adnoc Offshore has set a deadline of 23 October to submit commercial bids for the project.

Separately, Adnoc Offshore has undertaken a couple of projects to increase oil and gas production from the Lower Zakum field in Abu Dhabi’s waters.

Adnoc Offshore and its partners in the Lower Zakum concession intend to sustain oil production from the asset at its current level of 450,000 b/d until 2025, and then increase output to 470,000 b/d. This target will be achieved through the Lower Zakum early production scheme 2 (EPS 2) and proved developed producing (PDP) project.

Contractors submitted technical bids for the EPC works on the Lower Zakum EPS 2/PDP project by 11 September. While the EPS 2/PDP project is anticipated to increase the Lower Zakum concession’s oil production potential to 470,000 b/d by 2027, Adnoc Offshore’s larger, longer-term objective is to raise the asset’s output capacity to 520,000 b/d by 2027 and maintain that level until 2034.

This strategic goal will be accomplished through the Lower Zakum Long-Term Development Plan (LTDP-1) project. Front-end engineering and design (feed) work is progressing on the Lower Zakum LTDP-1 project and is being performed by France’s Technip Energies.

Onshore oil output

Adnoc Onshore, meanwhile, has started a slew of projects to spike crude output from fields such as Asab, Bab, Northeast Bab, Bu Hasa, Mender, Qusahwira, Sahil and Shah.

An EPC contract, estimated to be worth more than $300m, for the third development phase of the Sahil oil field was recently awarded by Adnoc Onshore to local contractor Target Engineering Construction Company.

Another project being pursued by Adnoc Onshore relates to the conversion of wells and installation of associated tie-ins at the southeast cluster of oil fields in Abu Dhabi. The EPC scope of work has been divided into two packages, with technical bids submitted by contractors in August.

Increasing production from Abu Dhabi’s onshore fields, some of which have been in operation since the 1960s, is equally crucial for Adnoc to hit its 5 million b/d by 2027 target. The capacity enhancement projects that Adnoc Onshore has been advancing indicate the importance its parent entity attaches to maintaining and raising output from its onshore assets.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11205562/main.jpg
Indrajit Sen

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

Click here to register
Exclusive from Meed
Related Articles
  • Larsen & Toubro announces EPC agreement with PDO

    31 July 2026

    Indian contractor Larsen & Toubro (L&T) has announced that it has signed a six-year engineering, procurement and construction (EPC) framework agreement with Petroleum Development Oman (PDO).

    Under the agreement, L&T said its subsidiary, L&T Energy Hydrocarbon Onshore, has been selected as one of four EPC contractors to participate in PDO’s upcoming front-end engineering and design (feed) and EPC projects over the agreement period.

    MEED recently reported that Mumbai-headquartered L&T had become the fourth contractor to join the pool of EPC service providers created by PDO to facilitate the tendering and award of future greenfield and brownfield projects within its Block 6 concession in the sultanate.

    Prior to picking L&T, majority state-owned PDO selected the following contractors:

    • Engineering for the Petroleum & Process Industries (Enppi) (Egypt) / Petrojet (Egypt)
    • GS Engineering & Construction (South Korea)
    • Jereh (China)

    L&T was previously expected to join these contractors in the initial round of framework agreement signings that took place on 19 July, but it later engaged in a final round of discussions with PDO over terms and conditions, sources previously told MEED.

    “L&T remains committed to supporting In-Country Value (ICV) development in Oman through opportunities for local suppliers, subcontractors and service providers, and the continued development of local capabilities,” the Bombay Stock Exchange-listed company said on 31 July.

    Separately, the Egyptian consortium of Enppi and Petrojet confirmed its EPC framework agreement with PDO, adding that its duration is six years.

    Contractors holding EPC framework agreements will be invited by PDO to participate in tenders for up to eight projects under the arrangement, which are estimated to have a combined value of up to $6bn.

    The framework pool of contractors will be structured similarly to the Long-Term Agreement pool of EPC service providers operated by Saudi Aramco for its offshore and onshore projects.

    MEED previously reported that contractors submitted proposals for the EPC framework structure by 27 April.

    Before that, PDO issued the tender for the proposed EPC framework agreement on 22 February, setting a deadline of 9 March for technical clarifications and a cut-off date of 11 March to confirm or decline participation, according to sources.

    MEED reported last year that PDO had issued a prequalification document on 17 April 2025, outlining its requirements, criteria, planned projects and other aspects of the EPC framework agreement. At that time, PDO aimed to appoint two tiers of contractors for two categories of projects, known as Wave 1 and Wave 2.

    PDO’s Wave 1 and Wave 2 projects are as follows:

    Raba hub development – Oil

    The Raba hub project forms part of the Qarn Alam growth development in the northern area of the PDO concession. The strategy covers nearby fields, including Raba Infill and Raba East.

    Production from Raba Infill will be routed to the existing Raba gathering station (RGS), while output from Raba East will be directed to the proposed Raba hub station (RHS).

    Modifications to the RGS are planned to accommodate additional volumes from Raba Infill. An interconnection between the RGS and RHS is also proposed to enhance operational flexibility. The project is expected to unlock an estimated 176 million barrels of unconventional reserves and increase production by about 50,400 barrels a day (b/d) by 2029.

    Wadi Umairi development – Oil and gas

    Scope includes oil and gas processing facilities such as separators, storage tanks, water injection pumps, a gas sweetening unit, off-plot infrastructure and utilities.

    Rabab Harweel Integrated Project (RHIP) tranche 2 – Oil and gas

    The RHIP involves miscible gas injection at several fields and is divided into two tranches. Tranche 2, scheduled to come on stream from 2028, aims to expand oil production capacity and enhance gas injection.

    The scope also includes sustaining gas supply from the reservoir through the installation of a depletion compression facility and expansion of the off-plot gas network.

    Bout full-field development – Oil and gas

    Scope includes remote manifold stations (RMSs), a gathering station, multiport selector valves, water injection manifolds, separators, a hydrocyclone package, water injection pumps and utilities.

    Dulaima carbon dioxide-based enhanced oil recovery – Carbon capture, utilisation and storage 

    Scope includes a processing facility to handle incremental hydrocarbons and carbon dioxide (CO2) volumes, including CO2 recycle injection.

    Makarem development – Sour oil and gas

    Scope includes a gathering station, RMSs, water injection systems, manifolds, pumps, separators and utilities. It also involves a greenfield sour gas facility with gas sweetening and sulphur recovery units.

    Amal South-East Development South – Gas

    Hawqa Hasirah Development South – Gas

    PDO previously intended to tender a project to build a new facility to handle additional oil production at the Al-Ghubar field reservoir in the Ghaba salt basin of Qarn Alam under its framework structure with selected EPC contractors, but eventually tendered it separately.

    PDO is the operator of the Block 6 hydrocarbons concession in Oman, which is the sultanate’s largest and most prolific concession. Situated onshore and covering an area of 75,119 square kilometres, Block 6 contains 202 oil fields and 43 gas fields, with PDO producing a total of approximately 680,000 b/d of oil and condensates from those fields.

    The Omani government holds a 60% stake in PDO. The other shareholders are UK-based Shell (34%), France’s TotalEnergies (4%) and Thai state-owned PTTEP (2%).

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17873448/main2634.jpg
    Indrajit Sen
  • Client seeks fresh PMC bids for Dorra gas project

    31 July 2026

     

    Al-Khafji Joint Operations (KJO) has sought fresh proposals from engineering firms for a revised tender for project management consultancy (PMC) services for the multibillion-dollar Dorra gas field facilities development project.

    MEED has been reporting since last March on KJO’s efforts to advance a project to produce gas from the Dorra offshore field, located in Gulf waters in the Neutral Zone shared by Saudi Arabia and Kuwait.

    KJO, which is jointly owned by Aramco subsidiary Aramco Gulf Operations Company and KPC subsidiary Kuwait Gulf Oil Company, has divided the engineering, procurement and construction (EPC) scope of work for the Dorra field gas production project into four EPC packages – three offshore and one onshore.

    The tender’s broad scope involves providing PMC services for the EPC works for the Dorra gas facilities development project.

    KJO issued the tender for PMC services on 29 September last year, and engineering firms submitted bids on 19 January this year, MEED previously reported.

    In the months following bid submission, KJO held discussions with bidders on contract terms and pricing, sources said. The client ultimately decided to retender the PMC services contract with a revised scope of work.

    “The regional conflict in the first and second quarters, and Iran’s hostilities against Gulf states, made the future of the [Dorra gas] project uncertain,” one source said.

    “[For KJO], developing a gas field that lies in disputed waters with Iran seemed risky business at the time, and that explains the large part of the delay [in the PMC tendering process],” the source added.

    KJO has now set a bid submission deadline of 17 August for the revised PMC tender for the Dorra gas facilities development project, sources said.

    The following firms, among others, are understood to have been invited by KJO to bid for the revised PMC tender:

    • Fluor (US)
    • KBR (US)
    • Technip Energies (France)
    • Wood (UK)
    • Worley (Australia)

    In addition to these bidders, firms that submitted proposals in the first tender round on 19 January included Saudi Arabia/UAE-based Kent and Spain’s Tecnicas Reunidas.

    Dorra offshore and onshore facilities

    KJO, meanwhile, is moving forward with the EPC tendering exercise for the main Dorra gas field facilities project. 

    Indian contractor Larsen & Toubro Energy Hydrocarbon (L&TEH) has won package 1 of the Dorra facilities project, which covers the EPC of seven offshore jackets and the laying of intra-field pipelines. The contract is estimated to be worth between $140m and $150m, MEED reported last October.

    A consortium of Italian contractor Saipem and L&TEH is understood to have submitted the lowest bid for offshore packages 2A and 2B, MEED reported in March. The only other consortium said to have submitted bids for packages 2A and 2B comprises Abu Dhabi-based NMDC Energy and South Korea’s Hyundai Heavy Industries.

    The EPC scope of work for package 2A includes Dorra gas field wellhead topsides, flowlines and umbilicals. Package 2B involves the central gathering platform complex, export pipelines and cables.

    Tecnicas Reunidas is understood to have emerged as the lowest bidder for onshore package 3, sources previously told MEED. Package 3 covers the EPC of onshore gas processing facilities.

    Saudi Arabia and Kuwait have been pressing ahead with their plan to jointly produce 1 billion cubic feet a day of gas from the Dorra gas field.

    The two countries have been producing oil from the Neutral Zone – primarily from the onshore Wafra field and the offshore Khafji field – since at least the 1950s. With a growing need to increase natural gas production, they have been working to exploit the Dorra offshore field, understood to be the only gas field in the Neutral Zone.

    Discovered in 1965, the Dorra gas field is estimated to hold 20 trillion cubic metres of gas and 310 million barrels of oil.

    The Dorra facilities scheme is one of three multibillion-dollar projects launched by subsidiaries of Aramco and KPC to produce and process gas from the Dorra field that have advanced in the past few months.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17871141/main0207.jpg
    Indrajit Sen
  • Saudi Arabia to localise desalination equipment production

    31 July 2026

    Saudi Water Authority (SWA) has announced plans to establish a factory in Saudi Arabia to manufacture energy recovery devices used to reduce power consumption at reverse-osmosis desalination plants.

    US-based Energy Recovery will operate the facility with a capacity to produce 2,000 devices a year. Production is scheduled to begin in the first quarter of 2027.

    SWA said the facility will be the first factory outside the US to manufacture the specialised equipment.

    Domestic demand in Saudi Arabia is estimated at 1,200 devices a year. About 40% of the factory’s production is expected to be supplied to markets in the GCC, Africa and Asia.

    Energy recovery devices improve the efficiency of desalination plants by recovering energy from the reverse-osmosis process, reducing power consumption and operating costs.

    SWA said local manufacturing will reduce dependence on imports, shorten supply times and improve the reliability of supply chains serving desalination plants.

    The authority estimates the market opportunity for the industry at more than SR547m ($146m). This includes about SR247m ($69.5m) in Saudi Arabia and SR300m ($80m) across the Middle East and North Africa.

    The project is expected to contribute about SR137m ($36.5m) to Saudi Arabia’s GDP by 2033. SWA expects localisation within the product’s value chain to exceed 80%.

    The project is also intended to support knowledge transfer and develop local capabilities in the manufacture of desalination technologies.

    SWA led efforts to establish the project in cooperation with Saudi Arabia’s Ministry of Investment, Ministry of Industry & Mineral Resources and Local Content & Government Procurement Authority.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17853316/main.jpg
    Mark Dowdall
  • EtihadWE seeks bids for retendered substations

    31 July 2026

    Etihad Water & Electricity (Etihad WE) has retendered a contract for the construction of two 33/11kV substations and associated underground cabling works in the Northern Emirates.

    The bid submission deadline is 24 August.

    Estimated to cost $100m, the project had originally been tendered earlier this year, with bids due on 20 May.

    The scope covers a new 33/11kV substation at Umm Dera (UMDR) in Umm Al-Quwain and another at Rams-3 (RMS3) in Ras Al-Khaimah. The contract also includes associated 33kV underground cabling works at both locations.

    The works are divided into four packages:

    • A1: New Umm Derra 33/11kV Substation (UMDR)
    • A2: New Rams-3 33/11kV Substation (RMS3)
    • A3: Umm Derra 33kV Underground Cabling Works
    • A4 : Rams-3 33kV Underground Cabling Works

    Etihad WE has invited prequalified engineering, procurement and construction (EPC) contractors to bid for the project on a lump-sum turnkey basis.

    According to the utility, contractors prequalified for both substation and cabling works can bid for the full scope. Contractors qualified only for substation works can bid for the complete substation scope, while those qualified only for cabling works can bid for the complete cabling scope.

    The project includes design, engineering, supply, construction, installation, testing and commissioning.

    The substation scope includes switchgear, transformers, protection and control systems and Scada systems. The project also covers civil works and supporting infrastructure.

    Etihad WE is responsible for electricity and water services in Ajman, Umm Al-Quwain, Ras Al-Khaimah, Fujairah and parts of Sharjah. The utility has been investing in new substations and transmission infrastructure as electricity demand continues to increase across the Northern Emirates.

    Earlier in July, the utility tendered a contract to build three new substations in Ajman.

    Estimated to cost $150m, the project involves the construction of three new 132/11kV substations in the Bahya, Rumaila and Liwara districts. It also includes associated 132kV underground cabling works to connect the substations to the existing transmission network.

    The bid submission deadline is 10 August.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17857843/main.jpg
    Mark Dowdall
  • Taqa raises $750m to finance water projects

    30 July 2026

    Abu Dhabi National Energy Company (Taqa) has issued a $750m five-year blue bond to finance sustainable water and wastewater management projects.

    The company said the transaction is the largest blue bond issuance in the Europe, Middle East and Africa region. It is also the largest blue bond issued by an integrated power and water utility globally.

    Issuing the bond allows Taqa to raise money from investors specifically to support water-related environmental projects. These can include desalination, wastewater treatment, water recycling and reuse, and infrastructure that improves water efficiency.

    It is the first blue bond issued under Taqa’s Green and Blue Finance Framework, and follows another blue financing transaction in the UAE earlier this year.

    On 8 January, Dubai-based Emirates NBD bank announced the completion of a $1bn dual-tranche sustainable bond issuance, comprising a $300m blue tranche with a three-year tenor and a $700m green tranche with a five-year tenor.

    Emirates NBD said at the time that the $300m tranche was the largest blue bond issued in the UAE and GCC. The proceeds are intended to support marine conservation and sustainable water projects, while proceeds from the green tranche will finance green initiatives.

    Taqa launched its original Green Finance Framework in 2023 and updated it in 2026 to include blue financing instruments. The latest issuance takes its total green and blue labelled bond issuances to $2.6bn since 2023.

    The Taqa financing also comes as the company expands and modernises its water infrastructure. Taqa is targeting reverse-osmosis technology for 66% of its desalination capacity by 2030, up from about 40% in 2025.

    In June, Taqa awarded a contract for the construction of a 1-million-cubic-metre emergency lagoon in Abu Dhabi. The project will be developed in two phases.

    Phase one has a capacity of 500,000 cubic metres and is planned to be completed within 18 months of the contract award.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17845953/main.jpg
    Mark Dowdall