Tuesday, May 4, 2010

UAE's ADNOC awards $5.6 billion worth of contracts for Shah

http://www.reuters.com/article/idUSTRE64012F20100501
(Reuters) - Italy's Saipem (SPMI.MI) emerged as the biggest winner in a $5.6 billion round of contracts from Abu Dhabi National Oil Company (ADNOC) for the Shah gas field, days after ConocoPhillips' (COP.N) bailed out of the project.

Saipem was awarded three contracts, worth a total of around $3.1 billion, for a gas process plant, sulphur recovery and product pipelines.

South Korea's Samsung Engineering (028050.KS) won a $1.5 billion contract for the utilities and offsite package.

The state-run ADNOC said a consortium of Spain's Tecnicas Reunidas (TRE.MC) and India's Punj Lloyd (PUJL.BO) secured a $463 million gas gathering package.

"The project facilities are scheduled for completion by 2014," ADNOC said.

On Thursday, ADNOC said it would proceed with the development of the Shah gas field despite ConocoPhillips' exit from the scheme.

Conoco announced it had ended its participation in the $10 billion Shah project on Wednesday, its second withdrawal in a month from high-profile projects in the Gulf.

The Shah scheme is to pump and purify gas with a high content of potentially deadly sulphur dioxide, making it tougher and more expensive to produce than conventional gas.

The Gulf Arab state has been slow to develop the world's fifth-largest gas reserves to meet demand from industry and the power sector. To meet the shortfall, it imports gas via pipeline from Qatar.

Shah would pump around 1 billion cubic feet per day (cfd) of raw gas, which after processing would give 540 million cfd of gas fit for consumption.

"Gas production is expected in mid-2014, that's the target," a UAE oil official told Reuters.

Separately, Abu Dhabi offshore unit ADMA-OPCO announced it had awarded U.S. company Fluor Corp (FLR.N) two front-end engineering and design contracts for the Umm Lulu and the Satah al-Razboot fields, although it did say how much the contracts were worth.

(Reporting by Raissa Kasolowsky in Dubai and Reem Shamseddine in Beirut; Editing by Keiron Henderson)

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