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Rethink: Adnoc group chief executive Sultan Ahmed Al Jaber. Photo:

ADNOC

Adnoc cancels key

awards for Hail &
Ghasha offshore sour gas
development
Project’s pre-construction services
agreements previously awarded to two
international consortia are cancelled

28 April 2023 12:35 GMT UPDATED 28 April 2023 12:40 GMT

By Nishant Ugal in New Delhi

Abu Dhabi National Oil Company (Adnoc) has

terminated two contracts covering onshore and
offshore work on its multibillion-dollar Hail &
Ghasha sour gas development, throwing the timing
of the project into doubt.

The much-delayed
development is
among the largest oil
and gas projects in
the United Arab
European player lands
Emirates in recent
offshore services
years and is at the
contract for ‘major’ Abu
heart of Abu Dhabi’s
Dhabi field development
drive to expand its
Read more
gas production
capacity by the end of this decade.

Hail & Ghasha is expected to provide feedstock for

Abu Dhabi’s gas export plans — along with its
ambition to emerge as a key hydrogen producer —
adding up to 1.5 billion cubic feet per day of gas at its
peak.

People close to the development said that Adnoc has

informed key stakeholders that the project’s pre-
construction services agreements (PCSAs), recently
awarded to two international consortia, now stand
terminated.

“The PCSAs have been cancelled and Adnoc is now

expected to shortly embark on a fresh tendering
process comprising multiple engineering,
procurement, construction and installation
packages,” one person said.

A second person said the termination of key Hail &

Ghasha deals is a big setback for the massive
development, which is already delayed by several
years.

“This [cancellation] could potentially lead to further

delays, as fresh bids will be invited in the coming
months,” he said.

Two consortia
On the onshore front, a consortium of France’s
Technip Energies, Italy’s Tecnimont and South
Korea’s Samsung Engineering earlier this year
landed work on the PCSA deal, Upstream reported.

In addition, a grouping of Abu Dhabi’s National

Petroleum Construction Company, China Petroleum
Engineering & Construction Corporation and Italy’s
Saipem was selected to work on the offshore
facilities.

Adnoc’s unique
execution model for
Hail & Ghash
envisaged fast-track
development.
Adnoc signs multiple
However, industry
low-carbon energy deals
sources said the
with Japanese players
operator saw cost
Read more
estimates rising and
was keen to switch back to the conventional
tendering model.

Earlier this year, Tecnimont said “the overall

contract value to the joint venture for the early
engineering and procurement works on the onshore
facilities is about $80 million.

“The PCSA scope of work also includes the

preparation of an open-book estimate for the full
project delivery scope, which will be considered as
part of the client’s final investment decision,” it
noted.

Following the completion of the project’s initial

engineering phase, the two groups were expected to
progress to the project’s EPCI phase through the
submission of commercial offers, a process which
has now been aborted.

An Adnoc spokesperson told Upstream that the

company and its “international partners remain
committed to delivering the gas mandated from the
Ghasha concession”.

“We do not comment on market speculation,” the

spokesperson said.

EPC phase
The Hail & Ghasha contractual packages were
expected to be together worth billions of dollars
once the project gets to the execution phase,
Upstream understands.

One industry source pointed out that Adnoc is now

expected to issue expressions of interest within
weeks for up to four EPCI packages comprising the
Hail & Ghasha development.

Development of the
Hail & Ghasha fields
is crucial to Abu
Dhabi’s ambition to
achieve gas self-
UAE player lands $412
sufficiency for the
million contract at
United Arab
world’s second-largest
Emirates and emerge
offshore oilfield
as a key gas exporter
Read more
in the long term.

“Overall, the development of our abundant sour

resources will support UAE gas self-sufficiency,
deliver substantial in-country value to drive
economic growth and reinforce the country’s role as
an international hub of excellence in sour gas
operations,” Adnoc told Upstream last year.

The emirate of Abu Dhabi also perceives gas as a key

transition fuel for the future, which is likely to be
less dependent on oil resources.

Adnoc has also signed liquefied natural gas supply

agreements with key European players and is
building a 10 million tonnes per annum
regasification terminal at Fujairah to cater to the
rising gas demand in Europe and Asia.

Workscope
Technip Energies has been involved with the revised
front-end engineering and design study for the
entire Hail & Ghasha project.

Bechtel of the US previously carried out FEED work

for the development, but Technip Energies is
expected to have incorporated additional
engineering to optimise the project.

Hail & Ghasha is

likely to involve
offshore drill centres,
subsea pipelines,
umbilicals, cables
Rivals lock horns for
and risers.
giant Adnoc LNG export
terminal project It also involves an
Read more offshore processing
plant and central
living quarters.

Work on the Manayif onshore processing plant,

export pipelines, utilities and other related facilities
is part of a wider workscope, project watchers said.

Previous tender
Adnoc had previously tendered four EPC packages
covering most of the work for Hail & Ghasha.

However, all these tenders were cancelled due to the

ongoing optimisation process.

Another package involving work on Hail & Ghasha’s

artificial islands has already been awarded to the
UAE’s National Marine Dredging Company (NMDC).
This $1.4 billion contract includes dredging, land
reclamation and construction of artificial islands in
the first phase of development.

NMDC is building 10
new artificial islands
and two causeways,
as well as expanding
an existing island, Al
Adnoc targets $50
Ghaf.
billion valuation from
giant gas initial public Adnoc’s partners in
offering the Ghasha
Read more concession include
Eni at 25%,
Wintershall Dea at 10%, and OMV and Lukoil each
holding 5%.

The Hail and Ghasha fields are located offshore Abu

Dhabi in water depths of less than 15 metres.

Read more
Adnoc subsidiary signs floater deal for India LNG
import terminal

Abu Dhabi state giant set to combine two major

gas companies

Contractors prepare bids for prized Adnoc

offshore framework agreement

Adnoc nearing decision phase for $10 billion-plus

Hail & Ghasha contracts

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Field Development News ADNOC Abu Dhabi UAE

Hail & Ghasha Sultan Ahmed Al Jaber

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