Adnoc giant announces further delay in sour gas project

May 7, 2020

Due to the Covid-19 pandemic which continues to impact oil and gas projects in the United Arab Emirates, Abu Dhabi’s national oil company (Adnoc) is having to postpone the bidding process for its offshore sour gas project Hail & Ghasha by at least one month. The tender includes four large multi-billion-euro contracts.

from google images (adnoc.ae)

According to internal sources, the Abu Dhabi state-controlled giant has recently informed contractors that the commercial bids for the Hail & Ghasha packages will be submitted on 31^st May.

Originally, the award of the Hail & Ghasha contracts were planned to take place by the end of the first quarter of 2020, but due to the coronavirus crisis the bidding process was delayed by more than six months. The project could continue to be revised as the pandemic situation evolves.

According to an observer of the project, market fundamentals have changed drastically since the project has moved into the development stage and Adnoc could consider a thorough review of the sour gas project, mainly to look for cheaper development options.

The viability of the project is of concern as other international companies partnering with Adnoc in the Ghasha concession could also request a review of this costly development. In addition, the recent cancellation of two major contracts for its Dalma sour gas project, raises concerns about the UAE’s intention to continue investing in this project.

Hail & Ghasha is touted as the UAE’s largest oil and gas project this year and is likely to add up to 1 billion cubic feet of gas per day from 2024 as part of Adnoc’s master plan and long-term strategy for 2030.

More than US$10 billion of public-private partnership contracts involving the development of Adnoc’s Hail & Ghasha sour gas are up for grabs and the overall development will be worth approximately US$20 billion.

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by Nicolas BOUDOU