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• 
  Adnoc sees project spending uptick

  25 April 2024

  The latest news from the UAE's upstream sector includes:

  > Contractor orders compressors for Adnoc project
  > Adnoc Offshore awards Upper Zakum contract
  > Contractors prepare bids for Lower Zakum oil project
  > Adnoc Onshore awards contracts for well tie-ins packages
  > Adnoc Onshore evaluates prices for fields upgrade
  > Kent wins framework agreement with BP
  > Dubai-based company wins Egypt oil contract extension

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  Abu Dhabi National Oil Company (Adnoc) spent close to $22bn last year on upstream projects, making it one of the best years on record for oil and gas project capital expenditure (capex) in the UAE, if not the top.

  Adnoc and its partners in the Ghasha concession dominated spending in 2023, awarding contracts worth $16.94bn in early October for engineering, procurement and construction (EPC) works on the Hail and Ghasha sour gas production project.

  The investment represents the largest-ever capex on a single oil and gas project in the UAE. It marks a giant leap for the country in its goal to become self-sufficient in natural gas production. As such, the project investment is also having a galvanising, trickle-down effect on the UAE oil and gas supply chain.

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

  A consortium of Abu Dhabi’s NMDC Energy and Italian contractor Saipem was awarded the project’s offshore 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.

  Robust spending

  Adnoc is expected to maintain robust spending on upstream projects this year, if not match the 2023 level, as it strives to achieve its oil and gas production targets. The Abu Dhabi energy giant aims to attain an oil production capacity of 5 million barrels a day (b/d) by 2027 and become self-sufficient in gas production by the end of this decade.

  Adnoc is understood to have already spent more than $2.3bn so far this year on projects deemed vital to reaching its crude production goal.

  Adnoc Group subsidiary Adnoc Offshore awarded the main EPC contract in mid-March for a project to increase the oil production potential of Abu Dhabi’s largest producing oil asset – the Upper Zakum offshore field – to 1.2 million b/d.

  UAE-based Target Engineering Construction Company won the contract for the project, which is estimated to be worth $825m. 

  The main scope of work on the project involves the EPC of several 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.

  Also in 2024, another Adnoc Group subsidiary, Adnoc Onshore, has awarded main contracts totalling more than $1.5bn for two packages on a project involving the conversion of wells and the installation of associated tie-ins at the southeast cluster of oil fields in Abu Dhabi.

  Package 3 covers the EPC of well tie-ins and other associated structures at the Asab and Sahil oil fields, while package 4 relates to the Shah, Qusahwira and Mender fields.

  Adnoc Onshore split the scope of work on packages 3 and 4 and appointed two contractors for each package.

  Pakistan-headquartered Descon Engineering and Galfar Engineering & Construction Emirates, the UAE division of Omani contractor Galfar Engineering & Contracting, have won contracts for package 3, according to sources.

  Galfar Engineering & Construction Emirates has also won a contract for package 4, while Abu Dhabi-based Al Nasr Contracting Company has secured the other contract, sources said. The combined values of the EPC contracts awarded by Adnoc Onshore for packages 3 and 4 are estimated to be $790m and $760m, respectively.

  Upcoming tenders

  Looking ahead, Adnoc Offshore is also preparing to issue the main EPC tender for a second phase of the project to increase the oil production capacity of the Upper Zakum field development.

  Separately, contractors are preparing bids for a major project to boost oil production at the Lower Zakum offshore hydrocarbons concession in Abu Dhabi.

  The Lower Zakum hydrocarbons zone is 65 kilometres northwest of Abu Dhabi in the Gulf’s waters. Adnoc Offshore holds the majority 60% stake in the Lower Zakum asset. Foreign partners include an Indian consortium of companies led by ONGC Videsh (10%), Japan’s Inpex Corporation (10%), China National Petroleum Corporation (10%), Italy’s Eni (5%) and France’s TotalEnergies (5%).

  Adnoc and its partners in the Ghasha concession dominated spending in 2023, awarding contracts worth $16.94bn in early October for EPC works on the Hail and Ghasha sour gas production project

  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.

  Adnoc Offshore issued the main EPC tender for the multibillion-dollar Lower Zakum LTDP-1 project in March. Contractors invited to bid have until the end of July to submit technical bids for the project, while commercial bids are due in September.

  Adnoc Offshore intends to award EPC contracts for the Lower Zakum LTDP-1 project by the end of the year.

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

  > COMMENT: Non-oil activity underpins UAE economy
  > GVT & ECONOMY: Non-oil activity underpins UAE economy
  > BANKING: UAE banks seize the moment
  > DOWNSTREAM: UAE builds its downstream and chemicals potential
  > 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/11705970/main.jpg

  Indrajit Sen
• 
  Bahrain mall to install solar carport

  24 April 2024

  The Avenues-Bahrain has signed a solar power purchase agreement (PPA) with UAE-headquartered solar company Yellow Door Energy (YDE) for a 3.5MW solar carport system encompassing the mall’s entire outdoor parking facility.

  According to the shopping mall operator, YDE will build, operate and maintain the solar carport, which will comprise over 6,000 bi-facial solar panels providing shade for 1,025 parking spots while generating over 5.8 million kilowatt-hours (kWh) of clean energy in its first year.

  The Avenues-Bahrain expects construction of the solar carport to begin soon and be completed by the fourth quarter of 2024.

  The solar carport, covering an area of 23,500 square metres (sqm), will complement the mall’s four-year-old rooftop solar photovoltaic (PV) system, which has a capacity of 250KW and offsets 300 metric tonnes of carbon emissions annually.

  The Avenues-Bahrain win marks YDE’s sixth secured solar project in Bahrain, bringing its total portfolio in the country to over 30MW of awarded solar projects.

  https://image.digitalinsightresearch.in/uploads/NewsArticle/11709324/main.jpg

  Jennifer Aguinaldo
• 
  No extension for Dubai sewer tunnel prequalification

  24 April 2024

  

   

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  Dubai Municipality expects interested engineering, procurement and construction (EPC) companies to submit their statements of qualifications (SOQs) by the end of April for the contracts to develop the Dubai Strategic Sewerage Tunnels (DSST) project.

  “No further extension has been granted,” a source close to the project tells MEED.

  International, regional and local EPC contractors are keen to prequalify to bid for the contracts for the $22bn DSST scheme, which Dubai Municipality is implementing on a public-private partnership (PPP) basis.

  In addition to its size, the project is gaining significant interest due to its unique procurement approach, whereby EPC contractors’ prequalification precedes developers’ prequalification.

  Dubai Municipality is undertaking the prequalification process for EPC contractors ahead of prequalifying companies that can bid for the contracts to develop and operate various packages of the project.

  According to industry sources, the floods resulting from last week’s storm that hit Dubai and other emirates have also made implementing the project more urgent. 

  The bidders for each of the PPP requests for proposals (RFPs) will be prequalified consortiums comprised of sponsors, EPC contractors and operation and management (O&M) contractors.

  MEED previously reported that the overall project will require a capital expenditure of roughly AED30bn ($8bn), while the whole life cost over the full concession terms of the entire project is estimated to reach AED80bn.

  The project aims to convert Dubai’s existing sewerage system from a pumped system to a gravity system by decommissioning the existing pump stations and providing “a sustainable, innovative, reliable service for future generations”.

  Dubai currently has two major sewerage catchments. The first in Deira is Warsan, where the Warsan sewage treatment plant (STP) treats the flow.

  The second catchment, called Jebel Ali, is in Bur Dubai, where the wastewater is treated at the Jebel Ali STP.

  DSST-DLT packages

  Under the current plan, the $22bn DSST project is broken down into six packages, which will be tendered separately as PPP packages with concession periods lasting between 25 and 35 years.

  The first package, J1, comprises Jebel Ali tunnels (North) and terminal pump stations (TPS). The tunnels will extend approximately 42 kilometres, and the links will extend 10km. 

  The second package, J2, covers the southern section of the Jebel Ali tunnels, which will extend 16km and have a link stretching 46km.

  W for Warsan, the third package, comprises 16km of tunnels, TPS and 46km of links.

  J3, the fourth package, comprises 129km of links. Once completed, Dubai Municipality will operate them, unlike the first three packages, which are envisaged to be operated and maintained by the winning PPP contractors.  

  J1, J2 and W will be procured under a design-build-finance-operate-maintain model with a concession period of 25-35 years.

  J3 will be procured under a design-build-finance model with a concession period of 25-35 years.

  J1, J2, W and J3 will comprise the deep sewerage tunnels, links and TPS (DLT) components of the overall project.

  MEED understands the project’s remaining two packages, the expansion and upgrade of the Jebel Ali and Warsan STPs, will be procured in a process separate from the four DSST-DLT components.

  The RFPs for the four DSST-DLT packages will likely be issued sequentially, staggered around six to 12 months apart.

  Dubai Municipality has appointed Abu Dhabi-headquartered Tribe Infrastructure Group as lead and financial adviser, UK-based Ashurst as legal adviser and the US’ Parsons as technical adviser for the DSST project.

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  Jennifer Aguinaldo
• 
  UAE and Oman firms sign $32bn energy deal

  24 April 2024

  Register for MEED's guest programme 

  An industrial and energy project valued at an estimated AED117bn ($31.8bn) topped the recent investment agreements reached between the UAE and Oman following Sultan Haitham Bin Tariq’s visit to the UAE capital earlier this week.

  The package encompasses renewable energy initiatives, including wind and solar projects, alongside green metals production facilities.

  The agreement’s signatories included Abu Dhabi National Energy Company (Taqa), Abu Dhabi Future Energy Company (Masdar), Emirates Global Aluminium, Emirates Steel Arkan, OQ Alternative Energy and Oman Electricity Transmission Company.

  Details of the planned projects have not yet been disclosed, although the production of green steel and green aluminium in either jurisdiction is implied.

  The companies signed the agreements on 22 April in the presence of Sheikh Theyab Bin Mohamed Bin Zayed Al Nahyan, chairman of the Office of Development and Martyrs’ Families Affairs at the Presidential Court, and Sheikh Hamed Bin Zayed Al Nahyan, managing director of Abu Dhabi Investment Authority.

  Along with other technology and infrastructure-related partnerships and projects, an agreement for the UAE-Oman rail connectivity project, valued at AED11bn, was also signed.

  Photo: WAM

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  MEED’s latest special report on Oman includes: 

  > COMMENT: Muscat needs to stimulate growth
  > GOVERNMENT & ECONOMY: Muscat performs tricky budget balancing act
  > BANKING: Oman banks look to projects for growth
  > OIL & GAS: Oman diversifies hydrocarbons value chain
  > POWER & WATER: Oman expands grid connectivity
  > HYDROGEN: Oman seeks early hydrogen success
  > CONSTRUCTION: Oman construction is back on track

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  Jennifer Aguinaldo
• 
  Abu Dhabi and Oman launch $180m tech fund

  24 April 2024

  Abu Dhabi-based investment and holding company, ADQ, and Oman Investment Authority (OIA) have launched a $180m technology focused vehicle called Jasoor Fund.

  Jasoor Fund aims to bolster Oman’s digital economy as well as the wider Middle East and North Africa (Mena) region by supporting high-growth technology companies in sectors such as finance, education, health care, clean energy, food, agriculture and logistics.

  OIA is represented by Ithca Group, formerly known as Oman Information and Communication Technologies Group, in the fund.

  According to ADQ, the fund’s core focus will be on innovative technology companies established in the sultanate, in addition to technology startups in other countries in the region.

  It will undertake investments in high-growth technology companies at various stages of development that have established business models.

  Mohamed Hassan Alsuwaidi, ADQ managing director and chief executive, said the launch of Jasoor Fund “reinforces our commitment to make investments that unlock the potential of key sectors of the economy, while creating lasting value for stakeholders”.

  Jasoor Fund is part of broader framework agreement signed between both parties in 2022, when they identified investment opportunities worth over $8bn across key sectors of Oman’s economy.

  https://image.digitalinsightresearch.in/uploads/NewsArticle/11707308/main.jpg

  Jennifer Aguinaldo