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Tue 7 Jun 2005 04:00 AM

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Ageing facilities hurt ADMA

Senior official: US $240 million Zakum gas processing project a response to “nightmare” of old equipment.

Abu Dhabi Marine Operating Company (ADMA-OPCO), the offshore arm of ADNOC, will install a new gas processing facility at Lower Zakum by the end of 2008.

The installation, details of which were revealed exclusively to Oil&Gas Middle East, will process associated gases expected from the planned increase in output at the field.

ADNOC has set ADMA-OPCO a production target of 600,000 barrels per day (bpd) for the year 2008, of which around 325,000 bpd will come from the Lower Zakum field. Currently, Lower Zakum produces 280,000 bpd, about 12% of the UAE’s total oil production.

The new facility will therefore have a basic annual handling capacity of 325,000 stock bpd with the ability to handle 350,000 bpd. Crucially, the new facility will also remove a “nightmare” at Zakum, according to an official closely involved in the project. Currently, associated gases from the field are only processed by the Gas Gathering Platform 2 Compressor Train (GG2), but the new facility will be an extension and also offer backup capacity at the field if GG2 has to be closed down.

“This project will remove the nightmare for [us in] Zakum,” said the ADMA official, a senior figure in the projects division who spoke on condition of anonymity.

“If GG2 is shut down for any reason then we are in deep trouble, as we have to stop production from Lower Zakum. When this new project is complete, we can process the excess gas and also allow for GG2 maintenance.”

US $240 million has been earmarked for the project. However, sources at Technip, which has been awarded the consultancy contract, say that the final cost can only be determined after front end engineering design (FEED) completion. The project manager also said that the estimated increase in production from ADMA in 2008 could not have been handled by GG2.

The project, he admitted, was long overdue, as the Lower Zakum field is heavily reliant on GG2. Although the company has realised the need to replace or repair its ageing infrastructure, the official admitted that the poor state of facilities was becoming a “headache” to the company.

Most pipelines and flowlines are between 20 and 25 years of age. The company is now waking up rather late to the problems of corrosion, he admitted, but is making up for lost time. “We at ADMA have understood that increasing production means primarily investments and are doing our best to enhance and improve facilities,” he said.

This neglect of infrastructure by oil companies in the Middle East is one of the reasons for high oil prices, according to International Energy Agency (IEA) Middle East researcher, Daniya Chaladi.

“Though I cannot comment on the ADNOC facilities as I have not personally inspected them, I do agree that investments in the Middle East region are rather late and a direct consequence of this is the high oil prices,” she told Oil&Gas Middle East.

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