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ADNOC Awards Contract for Construction of Ghasha Concession Artificial Islands

ADNOC Awards Contract for Construction of Ghasha Concession Artificial Islands

Thursday, 7 February, 2019 - 07:30
Minister of State Sultan Ahmad Al Jaber and several ADNOC and NMDC officials look over a model of the project. Asharq Al-Awsat
Abu Dhabi - Asharq Al-Awsat
The Abu Dhabi National Oil Company (ADNOC) said Wednesday it has awarded 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 (US$1.36 billion) and will achieve substantial In-Country Value of over 70 percent. 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. At peak construction, the project is expected to employ over 3,500 people.

Sultan Ahmad Al Jaber, Minister of State and ADNOC Group CEO 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.

"NMDC was selected after a rigorous and competitive tender process. The award of this project to a UAE company will generate substantial In-Country Value, supporting local economic growth. In addition, it demonstrates the rapid progress ADNOC is making to leverage and create value from Abu Dhabi’s substantial, untapped, hydrocarbon resources."

As part of the selection criteria for the contract, ADNOC carefully considered the extent to which bidders would maximize In-Country Value in the delivery of the project. This is a mechanism integrated with ADNOC’s tender evaluation process, aimed at nurturing new local and international partnerships and business opportunities, catalyzing socio-economic growth and creating job opportunities for UAE nationals. 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 AED 3.62 billion (almost US$1 billion). NMDC will also work with international partners to deliver the project.

Mohammed Al Rumaithi, Chairman of NMDC, said, "We are proud of our partnership with ADNOC and to be awarded this exciting new mega-project. We are also very pleased at the contribution this project will make to the local UAE economy, to supporting ADNOC’s gas developments, and to progressing the UAE's strategy to develop the maritime sector, in order to compete globally.

"Enhancing In-Country Value is an important part of our work plan in the National Marine Dredging Company, as it is for ADNOC. We will achieve this by spending almost one billion dollars of the contract award in the UAE and creating additional employment opportunities for citizens in the maritime sector. We aim to increase the use of local resources, such as products, facilities and infrastructure in this sector of dredging equipment and services. NDMC will contribute to supporting the development and prosperity of the UAE."

Artificial islands provide significant cost and environmental benefits, particularly in shallow water, by enabling the use of lower-cost land-drilling rigs instead of high-cost offshore jack-up drilling rigs. They also provide greater flexibility for extended reach drilling when compared to offshore rigs. The use of artificial islands will eliminate the need to dredge over 100 locations for wells and provide additional habitats for marine life.

ADNOC has a proven record of developing artificial islands, including the construction of four artificial islands for the Upper Zakum expansion project. ADNOC’s Upper Zakum field is the second-largest offshore oil field and the fourth-largest oilfield in the world.

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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