MEED reported that contractors have named a consortium of Spain’s Tecnicas Reunidas and India’s Punj Lloyd as the low bidders on a contract to build an estimated USD 470 million gas gathering system at the Shah Gas field in the south of Abu Dhabi.
The engineering, procurement and construction contract is one of a series of deals being tendered on the USD 10 billion Shah Gas scheme being developed by Abu Dhabi National Oil Company and the US’ ConocoPhillips.
The sources said that the consortium’s bid of around USD 475 million beat bids of USD 480 million from Italy’s Saipem and USD 488 million from India’s Dodsal. The winning bidder will build a series of gas gathering facilities and pipelines at the field capable of producing 1 billion cubic feet per day of natural gas.
To date, the consortium partners have tendered a total of five deals on the project: the gas gathering system, a gas processing plant, a sulphur recovery unit, the off sites and utilities for the scheme and a series of product pipelines.
Contractors initially believed that the off sites and utilities deal was being contested by Tecnicas Reunidas and France’s Technip but sources close to another bidder, South Korea’s Samsung Engineering, now say the firm is the frontrunner to win the deal after submitting a price of around USD 1.4 billion.
Abu Dhabi wants to produce 1 billion cubic feet per day of sour or sulphur rich, gas from the Shah field, before separating the sulphur from the natural gas and transporting both to processing and distribution facilities at Habshan and Ruwais. The project has suffered numerous delays. In early January, ConocoPhillips and Adnoc delayed the final deadlines for the 5 main construction deals on the scheme until late March, as they reviewed the overall design of the project. They originally planned to use a pipeline to transport the sulphur to Habshan and Ruwais, but the local Union Railway Company was asked in October to look at the feasibility of building a 264 kilometers railway line instead, which would be used to transport granulated sulphur.
A decision is due by the end of March, with Union Railway said to be aggressively pursuing its proposal. The company said that it will launch the tender for construction deals on the Shah Ruwais railway in the Q2 of the year. The US engineering firms, Bechtel, Veco and Fluor, are waiting for news from the partners on two project management consultancies to oversee the construction of the project, which are expected to be awarded in April.
Contracts to build sulphur handling facilities at Ruwais along with a sulphur granulation plant at either Ruwais or Shah and the sulphur pipeline deal are all on hold until the partners make a decision on which transport scheme to use, although contractors believe that the sulphur handling contract will be tendered by the end of April.
(Sourced from MEED)
