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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.

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Indrajit Sen

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