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Wed 6 Feb 2019 02:14 PM

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UAE's ADNOC awards $1.36bn contract to build artificial islands

National Marine Dredging Company will build islands in first phase of development of the Ghasha oil and gas concession

UAE's ADNOC awards $1.36bn contract to build artificial islands
Under the terms of the contract, NMDC will construct 10 new artificial islands and two causeways, as well as expand an existing island, Al Ghaf.

Abu Dhabi National Oil Company (ADNOC) announced on Wednesday the award of a dredging, land reclamation and marine construction contract to build multiple artificial islands in the first phase of development of the Ghasha concession.

The contract awarded to the UAE’s National Marine Dredging Company (NMDC) is valued at AED5 billion ($1.36 billion), the energy giant said in a statement.

The Ghasha concession consists of the Hail, Ghasha, Dalma, Nasr and Mubarraz offshore sour gas fields.

Under the terms of the contract, NMDC will construct 10 new artificial islands and two causeways, as well as expand an existing island, Al Ghaf. The project is expected to take 38 months to complete and will provide the infrastructure required to further develop, drill and produce gas from the sour gas fields in the Ghasha concession.

The award was signed by Abdulmunim Al Kindy, ADNOC Upstream executive director, and Yasser Zaghloul, NMDC CEO.

UAE Minister of State and ADNOC Group CEO, Dr Sultan Ahmed Al Jaber, said: “This award accelerates the development of the Hail, Ghasha and Dalma sour gas offshore mega-project, which is an integral part of ADNOC’s 2030 smart growth strategy.

"As one of the world’s largest sour gas projects it will make a significant contribution to the UAE’s objective to become gas self-sufficient and transition to a potential net gas exporter.

"The award of this project to a UAE company will generate substantial in-country value, supporting local economic growth.”

The successful bid by NMDC prioritized UAE sources for materials, as well as the use of mostly local suppliers, manufacturers and workforce, resulting in a total local spend of over AED3.62 billion. NMDC will also work with international partners to deliver the project.

The use of artificial islands will eliminate the need to dredge over 100 locations for wells and provide additional habitats for marine life.

ADNOC recently awarded stakes in the Ghasha concession to Italy’s Eni (25 percent), Germany’s Wintershall (10 percent) and Austria’s OMV (5 percent). The mega-project is expected to produce over 1.5 billion cubic feet of gas per day when it comes on stream around the middle of the next decade, enough to provide electricity to more than two million homes. In addition, more than 120,000 barrels per day of oil and high-value condensates are expected to be produced.

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