Field/project development

ADNOC Signs $1 Billion in Long-Term Engineering Agreements

The contracts will cover concept and other project engineering services for at least the next 5 years.

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Long-term engineering agreements were signed with eight contractors to bring concept and FEED services to various projects over the next half-decade.

The Abu Dhabi National Oil Company (ADNOC) has signed $1 billion in framework agreements for concept and front-end engineering design (FEED) services for major projects across its full value chain.

The framework agreements, which were signed with eight global engineering contractors, have the potential for 50% of the value to flow back into the UAE economy under ADNOC’s In-Country Value (ICV) program between 2021 and 2026. The scope of the agreements is based on the forecast requirement for external project engineering services across the ADNOC Group.

Contractors tapped for the agreements include AMEC International Ltd. (part of the Wood Group), Fluor, McDermott, Mott MacDonald, SNC-Lavalin International Arabia Ltd.–Abu Dhabi (part of the Kentech Group), Technip Energies, Worley, and a joint venture between Tecnicas Reunidas and NPCC. The agreements will run for 5 years with an option for a 2-year extension. The contractors have committed to set up and run enhanced training programs to further develop local expertise and enable knowledge transfer.

“These framework agreements follow a very competitive tender process and the smart nature of the deals will deliver substantial cost savings, optimize project delivery schedules, and provide ADNOC with increased flexibility to drive its growth targets and proactively respond to the demands of the fast-evolving energy landscape,” said Abdulmunim Saif Al Kindy, ADNOC people, technology, and corporate support executive director. “In addition, the agreements offer the potential to create additional skilled employment opportunities for Emiratis and include commitments that contracted services will primarily be carried out in the UAE, ensuring more economic value remains in the country from our contract awards.”

According to ADNOC, by structuring the framework agreements with a group of contractors instead of procuring smaller individual agreements, it was able to secure pre-agreed terms and conditions thereby reducing tendering cycles by months, achieve highly competitive rates by leveraging long-term contracts that service its entire portfolio, and establish a groupwide performance management and review process that provides high visibility of contractor performance.