Global Energy
UAE Green Lights $6.2B Umm Shaif Offshore Gas Development Project
UAE state-owned energy firm announced final investment decision July 21 for megaproject to tap natural gas supply atop operatnig offshore oil field
Despite new Iran conflict escalations, Persian Gulf energy producers are moving ahead with major projects, aiming to return the region’s hydrocarbon industry to normal operations.
Abu Dhabi National Oil Co. (ADNOC) and partners announced July 21 a final investment decision for the massive offshore Umm Shaif Gas Cap project, estimated as a $6.2 billion development and set for production in 2030. State-owned ADNOC holds 60% of the project, with partner energy companies TotalEnergies of France having a 20% stake, and Italy’s Eni and China National Petroleum Corp., each with 10% shares.
Development of the Umm Shaif gas cap, a natural gas layer that covers an underground UAE oil reservoir operating since 1958 offshore of Abu Dhabi, would boost the country's gas for domestic use and enhance its LNG production and export capacity, ADNOC said. It anticipates Asian population growth and wider energy demand, and targets 47 million metric tons per year of combined marketable LNG capacity by 2035, the statement said. UAE holds the seventh largest gas resources in the world.
Australian engineer-contractor Worley has been involved in front-end engineering design for the project, according to ADNOC.
The project has been weighed for some years and is part of the company’s announced integrated gas strategy to commercialize the Umm Shaif gas supply. First phase of development has an estimated output capacity of 600 million standard cubic ft per day of natural gas and associated liquids, equal to nearly 10% of daily UAE consumption. Further phases will boost output to 1.5 billion standard cubic ft per day, said the UAE firm and TotalEnergies.
“The investment includes three engineering, procurement and construction packages totaling $5.1 billion for large-scale offshore infrastructure, awarded to consortia comprising major UAE and international contractors,” ADNOC said in a statement.
EPC awardee names were not disclosed. But project bidders are believed to include consortia of UAE-based NMDC Energy and TechnipFMC; India-based Larsen & Toubro Hydrocarbon Engineering and Lamprell, a UAE-Saudi Arabia firm; and Saipem, based in Italy and Seatrium, based in Singapore with U.K.-based Petrofac; Other bidder names are believed to include KBR, Wood. McDermott International, China Offshore Oil Engineering Co., Hyundai Heavy Industries, Greece-based Archirodon, China Petroleum Engineering and Construction, Egypt-based Enppi and UAE-based Target Engineering, but contracts and roles were not confirmed.
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The final investment decision “marks another important step in developing Abu Dhabi's significant gas resources,” said TotalEnergies’ Chairman and CEO Patrick Pouyanne in a statement.
Umm Shaif project scope involves offshore infrastructure that will require construction of new processing and separation facilities, new and modified wellhead towers, riser platforms, flare structures and water disposal systems, according to ADNOC, The project also includes a $365 million drilling program covering 14 wells and integrated drilling services to be executed over 18 months using three existing rigs, it said.
“Together with our international partners, we are building on decades of responsible stewardship of Abu Dhabi’s longest-operating offshore field,” said Sultan Ahmed Al Jaber, ADNOC managing director and group CEO, who also is UAE Minister of Industry and Advanced Technology.
The Umm Shaif action follows award of a concession in late June for the onshore Bab Cap project, comprised of three reservoirs in the Bab Field and described as the largest gas cap development of its kind globally. This project targets production of about 1.5 billion cu ft of gas per day, said a statement from energy company bp, which holds a 10% project share. ADNOC holds 60%, with TotalEnergies at 10% and several smaller stakeholders.
