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• 
  Adnoc awards Upper Zakum field expansion contract

  12 November 2024

  

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  Adnoc Offshore has awarded the main contract for the second phase of 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 barrels a day (b/d).

  Abu Dhabi-based Target Engineering Construction Company has won the contract for engineering, procurement and construction (EPC) works on the project, which is known as UZ 1.2MMBD EPC-2.

  The value of the contract awarded by the offshore business of Abu Dhabi National Oil Company (Adnoc Offshore) is understood to be about $500m, according to sources.

  MEED recently reported that Adnoc Offshore was close to awarding the main contract for the UZ 1.2MMBD EPC-2 project.

  Apart from Target, the other bidders for the project included Greece-based Archirodon and UK-headquartered Petrofac.

  Adnoc Offshore received technical bids for the project by the 14 August deadline. Contractors submitted commercial bids for the project by the deadline of 2 October, MEED previously reported.

  Located 84 kilometres offshore in Abu Dhabi, Upper Zakum is the world’s second-largest offshore oil field and fourth-largest oil field.

  The Upper Zakum offshore development consists of four main artificial islands: Al-Ghallan, Umm Al-Anbar, Ettouk and Asseifiya – also known as Central Island, West Island, North Island and South Island, respectively.

  The scope of work on the UZ 1.2MMBD EPC-2 project covers the EPC of the following structures on Assefiya Island:

  • Integrated gas lift compressor and its associated facilities
  • Gas dehydration unit
  • Vapour recovery system
  • Electro-chlorination package
  • Seawater winning pumps
  • Seawater filtration package
  • Instrument air compressor
  • Air dryer package
  • Nitrogen generation package
  • Chemical injection package (scale inhibitor and biocide injection)
  • Pre-assembled pipe racks
  • Modular variable frequency drives room
  • Modular technical rooms
  • Piping tie-ins connection with existing facilities
  • Electrical, instrumentation and control and telecommunications tie-ins

  Adnoc Offshore has performed the front-end engineering and design (feed) work on the project in-house, it said in the expression of interest (EoI) document.

  MEED previously reported that Adnoc Offshore issued the EoI document for the EPC tendering phase on 8 February, with contractors submitting responses by 26 February.

  Adnoc Offshore then issued the main EPC tender for the project “in early June”, sources told MEED.

  Upper Zakum expansion

  The first phase of the programme to raise the Upper Zakum offshore field development’s oil production capacity to 1.2 million b/d was launched in 2019. The initial goal was to increase the field’s output potential to 1 million b/d by 2024, which was later increased to 1.2 million, with the project execution timeline eventually extended.

  In April, MEED reported that Adnoc Offshore had awarded the main EPC contract for the UZ 1.2MMBD EPC-1 project to UAE-based Target Engineering Construction Company. The value of the EPC contract won by Target is estimated to be $825m.

  Spanish contractor Tecnicas Reunidas won the contract for the feed works on the UZ 1.2MMBD EPC-1 project in 2019. UK-headquartered Wood Group was appointed as the project management consultant for the EPC phase.

  The project’s main scope involves the EPC of several surface facilities and plants at the Upper Zakum offshore development’s four main artificial islands.

  Upper Zakum oil production

  Adnoc has committed to a capital expenditure budget of approximately $30bn, along with its operating partners in the Upper Zakum hydrocarbons concession, Japan Oil Development Company (Jodco) and US-based ExxonMobil. 

  The strategic objective is to first raise the asset’s oil output from 640,000 b/d to 750,000 b/d through the UZ 750 project, and then eventually to 1.2 million b/d through the two phases of the ongoing UZ 1.2 MMBD project.

  Zakum Development Company (Zadco), which later merged into Adnoc Offshore, awarded EPC contracts for the UZ 750 project in 2012 and early 2013.

  The $817m first package was awarded to a consortium of Abu Dhabi’s NMDC Energy (then known as National Petroleum Construction Company) and France-based Technip Energies. Package two, the project’s largest EPC package, worth $3.7bn, was awarded to a consortium of UK-headquartered Petrofac and South Korea’s Daewoo Shipbuilding & Engineering.

  EPC work on UZ 750 began in 2014 and was completed in 2022.

  In October 2022, Adnoc Group subsidiary Adnoc Drilling set a world record for drilling the longest oil and gas well at the Upper Zakum concession, stretching 50,000 feet.

  The extended-reach wells will tap into an undeveloped part of the Upper Zakum reservoir, potentially increasing the field’s production capacity by 15,000 b/d without expanding or building any new infrastructure, Adnoc said.

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  Indrajit Sen
• 
  Swiss engineering firm wins Saudi railway design work

  12 November 2024

  

   

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  Switzerland-headquartered Pini Group has won the preliminary design contract for the dualisation of 230 kilometres of track on Saudi Arabia’s North Railway.

  The deal also covers the preliminary design and site selection of a new depot and the preparation of tender documents for the estimated SR4bn ($1.08bn) design-and-build contract, which is scheduled to be issued to selected contractors in late 2025.

  Two sections featuring five loops will have the additional track. They are:

  Section 1: From the Al-Zabirah 1/Nariyah Marshalling Yard to Ras Al-Khair

  Section 2: From Zabirah Junction to the Hail Intermodal Yard

  The Ministry of Transport & Logistic Services tendered Pini’s contract in October 2023 to provide additional phosphate ore freight capacity for Saudi Arabia Mining Company’s (Maaden) fertiliser expansion plans.

  Management of the project’s construction and post-completion operations will sit with Saudi Arabian Railways (SAR).

  The 2,750km-long North Railway, previously known as the North-South Railway, comprises a 1,550km freight line running from the Al-Jalamid phosphate mine and Waad Al-Shamal fertiliser production complex in the far northwest of the kingdom to Maaden’s diammonium phosphate fertiliser production and export facilities at Ras Al-Khair on the Gulf coast.

  It also consists of a 1,250km-long passenger line linking Riyadh with Al-Haditha near the Jordanian border.

  The deal marks the first major project win in Saudi Arabia for the 74-year-old engineering firm, which established its offices in the GCC in May 2023. It is delivering detailed design services for the Mid-Island Parkway Tunnel connecting Saadiyat Island to Umm Yifenah Island, and the Hafeet Rail project connecting UAE and Oman.

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  Edward James
• 
  Hitachi Energy rides HVDC boom

  12 November 2024

  The GCC region’s strong drive to decarbonise electricity generation, distribution and consumption has led to an increased demand for renewable energy and electric mobility, which in turn require strong, secure and reliable grids.

  “The key issue [among stakeholders] is how to stabilise the grid and maintain its resilience to ensure safety and security of supply,” Bruno Melles, global managing director for the Transformers Business Unit at Zurich-headquartered Hitachi Energy, tells MEED.

  Options to address this issue include offshore and onshore interconnections, particularly through high-voltage direct current (HVDC) networks, as well as the deployment of battery energy storage systems.

  HVDCs are broadly considered more environment-friendly compared to their alternating current predecessors by allowing electricity transmission over long distances with minimal losses.

  Several HVDC networks are under construction across the GCC states. The region’s first subsea power transmission network in Abu Dhabi replaces existing offshore gas turbine generators catering to Adnoc’s offshore operations with more sustainable power sources available in Abu Dhabi’s onshore power network.

  The Saudi-Egypt interconnection is also underway. Once completed, it will enable the daily exchange of up to 3,000MW of electricity, opening up potential energy trade between the GCC and other countries in the Gulf, Africa and Europe.

  Saudi Arabia also recently awarded a $5.3bn contract to interconnect its western, central and southern regions through an on-land HVDC network.

  In addition, in May this year, Hitachi Energy signed agreements with Enowa, the utility arm of Saudi gigaproject developer Neom, to supply three HVDC transmission systems with a total capacity to transmit up to 9,000MW of electricity.

  Discussions are under way for more of these types of projects, notes Melles, who says these projects reflect the need to integrate and secure the grid, particularly as more countries consider cross-border links and connecting their existing grids to remote renewable energy plants.

  As interconnection investments grow, the need for digitalisation will also grow as utilities and transmission system operators seek more precise ways to manage their electrical loads and avoid waste.

  Large users

  The presence of industries with high power demands such as refining has been a distinguishing feature of most GCC states' power systems.

  Most recently, the drive to deploy AI-based applications has spurred a boom in data centre construction particularly in the UAE and Saudi Arabia.

  “We’re seeing plans to build data centres with load capacities of up to 1,000MW,” explains Melles, who points out that these facilities are fast becoming a major power utilisation point similar to other large industries.

  The International Energy Agency estimates that data centres represent roughly 2% of global power consumption in 2022 and this is expected to more than double to 5% to 6%,  according to various projections.

  An increase in the large power user base, even as electrification increases, reinforces the need for more resilient grids that can deal with varying loads and distances and energy sources, according to Melles.

  Meeting demand

  Globally, transmission and distribution infrastructure buildout is expected to catch up with prolific investments to expand generation capacity as power and decarbonisation demands increase.

  Across the GCC, an estimated 49,000MW of conventional and renewable energy power generation plants are under construction as of October this year. The project pipeline remains robust, with key jurisdictions such as Saudi Arabia and Abu Dhabi aiming for renewable sources to meet up to 50% of their electricity demand by the end of the decade.

  The GCC region’s power transmission and distribution sector is also set to experience its best year in terms of the value of awarded contracts. 

  According to data from regional projects-tracking service MEED Projects, the total value of awarded contracts for substations, control centres, overhead lines and cables across the six GCC states reached an estimated $13.8bn between January and September 2024.

  This figure already exceeds by 81% the total value of contracts awarded in the preceding full year.

  To meet demand, Hitachi Energy, which supplies solutions ranging from large transformers, communication networks, cooling systems and cybersecurity to cable accessories, recently launched a $1.5bn programme to boost its transformer production capacity between 2024 and 2027.

  “We need to scale up capacity and availability, and we are committing with our parts suppliers… to be able to supply [transformers] to the industry,” explains Melles.

  Hitachi Energy is also, more crucially, investing in human resources as it expands its production capacity and presence globally. "We are investing in people across all skill levels in our company not just in our factories… because we believe resource constraints will be more serious than steel or copper constraints."  

  The executive notes that in addition to driving power demand, AI is a key development that suppliers like Hitachi Energy are following closely due to its potential to transform industries over time.

  Current AI applications enable predictive maintenance and reliability, where they can analyse data from sensors and maintenance records to predict when equipment may fail.

  The next stage, which Melles expects will cause widespread disruption, is when AI is applied to industrial process and engineering optimisation, which experts say may lead to increased efficiency, reduced resources and improved product quality, among others.

  “AI offers a great opportunity if used properly,” the executive concludes.

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  Jennifer Aguinaldo
• 
  Buhur, Nesma and Aljomaih bid low for Jubail-Buraydah link

  12 November 2024

  A developer team comprising local companies Aljomaih Energy & Water, Nesma Company and Buhur for Investment Company has been named as the preferred bidder for the contract to develop and operate Saudi Arabia’s second independent water transmission pipeline (IWTP) project.

  The project will link Jubail in the kingdom’s Eastern Province and Buraydah in the Qassim region over a 587-kilometre (km) pipeline that can transmit 650,000 cubic metres a day of water.

  The Aljomaih, Nesma and Buhur team proposed to develop the Jubail-Buraydah IWTP project for SR3.59468 a cubic metre.

  Saudi Water Partnership Company (SWPC) has also named a second team, comprising the local Vision Invest and UAE-based Abu Dhabi National Energy Company (Taqa), as the reserved bidder.

  The Vision Invest/Taqa team offered to develop the project for SR5.04214/cm.

  The Jubail-Buraydah IWTP project is larger than the kingdom’s first IWTP linking Rayis and Rabigh, which a consortium including the local Alkhorayef Water & Power Technologies Company and Spain’s Cobra Instalaciones y Servicios will develop and operate at a cost of SR7.78bn ($2bn).

  SWPC issued the request for proposals for the Jubail-Buraydah IWTP scheme to prequalified bidders in October last year.

  The transaction advisory team for the client comprises the US/India’s Synergy Consulting as financial adviser and the local Amer Al-Amr and Germany’s Fichtner Consulting as legal and technical advisers, respectively.

  SWPC’s obligations under the water transfer agreement will be guaranteed by a credit support agreement entered into by the Finance Ministry on behalf of the Saudi government.

  The project is part of the kingdom’s National Water Strategy 2030, which aims to reduce the water demand-supply gap and ensure desalinated water accounts for 90% of national urban supply to reduce reliance on non-renewable ground sources.

  Related read: SWPC focuses on desalination and sewage plants

  MEED reported in March that the responsibility for procuring several water transmission pipeline projects in Saudi Arabia has been transferred from SWPC to the Water Transmission & Technologies Company (WTTCO), which has recently been renamed Water Transmission Company (WTCO). 

  Earlier this week, WTCO invited companies to express interest in an upcoming tender to develop the Ras Mohaisen-Baha-Mecca independent water transmission system, which will have a contracted transmission capacity of 515,000 cubic metres a day, and extend approximately 300 kilometres.

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  Jennifer Aguinaldo
• 
  Team taps Siemens Energy for Remah 2 and Nairiyah 2

  11 November 2024

  

   

  A developer consortium comprising the UAE-based Abu Dhabi National Energy Company (Taqa), Japan’s Jera Company and the local Albawani Company is understood to have partnered with Germany’s Siemens Energy for the gas turbines to power the Remah 2 and Nairiyah 2 independent power projects (IPPs) in Saudi Arabia.

  The Remah 2 and Nairiyah 2 combined-cycle gas turbine (CCGT ) power plants will each have a capacity of roughly 1,800MW, requiring an estimated investment of $2bn each.

  Siemens Energy is also supplying its HL-class gas turbines, along with a 25-year maintenance contract, for the Taiba 2 and Qassim 2 IPPs, which Saudi Arabia awarded in November last year to a team led by the local Al-Jomaih Energy & Water Company.

  Principal buyer Saudi Power Procurement Company (SPPC) named the winning developer teams for its latest four CCGT IPPs on 7 November, more than two months after receiving bids in August.

  The Taqa, Jera and Albawani team successfully bid for the contracts to develop and operate the Remah 2 and Nairiyah 2 IPPs, while a consortium comprising Saudi Electricity Company (SEC), Riyadh-based utility developer Acwa Power and South Korea’s Korea Electric Power Corporation (Kepco) was named the winning bidder for the contracts to develop and operate the similarly-configured Remah 1 and Nairiyah 1 IPPs.

  Remah 2 and Nairiyah 2 will be located in Riyadh and the Eastern Region, respectively.

  The power generation projects will be developed using a build, own and operate (BOO) model over 25 years, with SPPC as the sole offtaker.

  SPPC has not disclosed the levelised costs of electricity proposed by the developers for each of the four contracts.

  SPPC previously indicated that the four power plants will operate using natural gas combined-cycle technology with a carbon-capture unit readiness provision.

  SPPC’s transaction advisory team for the Remah 1 and 2 and Al-Nairiyah 1 and 2 IPP projects comprises US/India-based Synergy Consulting, Germany’s Fichtner and US-headquartered Baker McKenzie. 

  Awarded gas-fired IPPs

  SPPC awarded contracts to develop four gas-fired power generation IPP projects last year.

  A consortium comprising SEC and Acwa Power signed the 25-year power-purchase agreements with SPPC to develop and operate the Qassim 1 and Taiba 1 IPP projects on 13 November 2023. Each plant has a capacity of 1,800MW. The two projects are valued at SR14.6bn ($3.9bn).

  China’s Sepco 3 will undertake the engineering, procurement and construction contract for the two projects, while US-based GE will supply the CCGT for the power plants. 

  A team comprising Jomaih Energy & Water, France’s EDF and the local Buhur for Investment won the contract to develop the 1,800MW Taiba 2 IPP and 1,800MW Qassim 2 IPP schemes.

  Each project is being developed on a BOO basis by the winning consortiums, which will be 100% owned by the successful bidders.

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  Jennifer Aguinaldo