Build Contracts Awarded for UAE Gas Pipeline Expansion

ADNOC Gas PLC said Monday it had awarded $550 million (AED 2 billion) engineering, procurement and construction contracts for a project expanding its natural gas sales pipeline network in the United Arab Emirates.

Simultaneously, it announced that the ownership of the project, called ESTIDAMA, was being transferred to its parent company. After the transfer, Abu National Oil Co. (ADNOC) will cover capital expenses while ESTIDAMA management remains under ADNOC Gas.

ESTIDAMA will extend the UAE’s gas pipeline network to over 3,500 kilometers (2,174.8 miles) from about 3,200 kilometers (1,988.4 miles) currently. The project will raise the transport capacity for customers in the northern part of the Gulf country.

ESTIDAMA “will bring lower-cost and sustainable natural gas to more locations across the country.” ADNOC Gas chief executive Ahmed Alebr said in a company statement.

The contracts went to Galfar Engineering & Contracting WLL Emirates and NMDC Energy PJSC. “Approximately 70 percent of the contracts’ value is expected to flow back into the UAE economy through ADNOC’s In-Country Value program, supporting local economic growth and diversification”, ADNOC Gas said.

After the transfer of ownership, ADNOC Gas will pay ADNOC a variable transmission fee based on actual pipeline throughput.

The first contract for the $2.4 billion ESTIDAMA was awarded 2021 and completed 2023, involving modifications on existing pipelines.

Last year ADNOC Gas awarded $1.34 billion ESTIDAMA contracts for the construction of new pipelines and a gas compression plant. Petrofac Emirates LLC and a consortium between CAT International Ltd. and National Petroleum Construction Co. PJSC, now NMDC Energy, bagged the contracts.

The compression plant will support increased gas production from the Habshan complex west of Abu Dhabi. The plant will comprise three trains, associated utilities and power systems, according to a press release by Petrofac June 30, 2023.

ADNOC Gas delivers over 60 percent of the UAE’s natural gas and supplies most of the gas needed by the local petrochemical industry, according to the company.

It plans to invest more than $13 billion between 2024 and 2028 for domestic and international growth. “ADNOC Gas is well-positioned to benefit from ADNOC’s planned expansion of oil production capacity to five million barrels per day by 2027, which will contribute to an increase in associated gas production”, it said in a news release May 7 announcing the investment plan and the company’s quarterly results.

“The Company is seeking to grow internationally and acquire new positions in the gas value chain in Europe, India, China and South-East Asia with the aim of enhancing the UAE’s presence in international LNG markets and generating an additional return that enhances its current business.”

Source: www.rigzone.com