ADNOC Awards $2 Billion in Drilling Contracts for Ghasha Gas Project

ADNOC Drilling and ADNOC Logistics & Services have won the newest round of contracts to develop the mega sour-gas project that will expand the UAE’s production of LNG.

Drilling in the UAE.
Source: Abu Dhabi National Oil Company (ADNOC).

The Abu Dhabi National Oil Company (ADNOC) has awarded contracts totaling $2 billion to ADNOC Drilling and to ADNOC Logistics & Services to enable up to 10 years of drilling to develop the offshore sour-gas Hail and Ghasha Project.

The awards announced by ADNOC Group CEO Dr. Sultan Ahmed Al Jaber on 27 July included a $1.3 billion contract for integrated drilling services and fluids, and a $711 million order for four island drilling units, both of which went to ADNOC Drilling.

In addition, ADNOC Logistics & Services picked up a separate $681 million contract for offshore logistics and marine support services.

The Hail and Ghasha Development is a part of the mega Ghasha Concession, the world’s largest offshore sour-gas development and a key component of ADNOC’s master plan to expand its liquefied natural gas (LNG) capacity to make the UAE gas self-sufficient and a global LNG supplier.

ADNOC aims to double its LNG production to 12 mtpa from 6 mtpa, a goal it included in its $127 billion spending plan for 2022–2026. The UAE boasts 215 Tcf of proven natural gas reserves, the seventh-largest in the world.

Production from the Ghasha Concession is planned to go onstream in 2025 and ramp up to a rate of 1.5 Bcf/D before 2030, according to ADNOC. The company said that four of the artificial islands contracted in February 2019 under a $1.3 billion dredging, land reclamation, and marine construction project are now complete and development drilling has begun.

Last November, ADNOC and its partners awarded two engineering, procurement, and construction contracts for the Dalma Gas Development Project, which is also a major part of the Ghasha Concession. ADNOC also awarded a contract to update the front-end engineering and design (FEED) for Hail and Ghasha by the end of 2022.

In updating the FEED contract, Abu Dhabi is seeking to further optimize costs and timing as well as provide for more efficient carbon capture.

Al Jaber, who also serves as Abu Dhabi’s Minister of Industry and Advanced Technology, said while announcing the newest round of contracts that more than 80% of the value of the awards will flow back into the UAE’s economy under ADNOC’s In-Country Value program.

The Ghasha Concession includes the following fields: Hail, Ghasha, Hair Dalma, Satah, Bu Haseer, Nasr, SARB, Shuwaihat, and Mubarraz; all located some 190 km northwest of Abu Dhabi.