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MEED | Adnoc begins fresh Hail and Ghasha tender process

 

Abu Dhabi National Oil Company (Adnoc) has invited contractors to express interest in a new engineering, procurement and construction (EPC) tendering exercise for the multibillion-dollar Hail and Ghasha sour gas development.

 

The expression of interest (EoI) document was issued to contractors shortly after midnight on 29 April, according to sources. Firms have been asked to express interest in the new EPC tendering round by 14 May.

 

The new EoI document details Adnoc’s latest EPC execution strategy for the Hail and Ghasha development. Under these plans, the offshore and onshore scope of work has been divided into three packages:

 

Package 1: Subsea pipelines, umbilicals, cables, risers and other offshore structures
Package 2: Offshore drilling centre facilities, the Ghasha offshore processing plant and central living quarters
Package 3: The Manayif onshore processing plant including offsite export pipelines and tie-ins, utilities, the main control building and process buildings. Work on a Ruwais sulphur-handling terminal and other non-process buildings is an optional scope for this package.

 

Adnoc’s move to start a fresh EPC tendering round comes just a couple of days after it cancelled the pre-construction services agreements (PCSAs) awarded to contractors in January.

 

The reason for these PCSAs being annulled is unclear, but sources say the cost estimates submitted for the project were higher than the client’s overall budget.

An Adnoc spokesperson told MEED: “Adnoc and our international partners remain committed to delivering the gas mandated from the Ghasha concession. We do not comment on market speculation.”

 

PCSAs cancelled

 

The PCSAs signed in January with two consortiums, comprising three contractors each, marked the start of detailed engineering work and procurement of critical long-lead items for the offshore and onshore scope of work on the Hail and Ghasha development.

 

A consortium of France-headquartered Technip Energies, South Korean contractor Samsung Engineering and Italy’s Tecnimont was awarded the PCSA for the onshore package. The contractors revealed the value of the contract to be approximately $80m.

 

Italian contractor Saipem, Abu Dhabi’s National Petroleum Construction Company (NPCC) and state-owned China Petroleum Engineering & Construction Company (CPECC) won the PCSA for the offshore package, worth $60m.

 

Previously, the onshore work on the Hail and Ghasha scheme involved the construction of a gas process plant, pipeline network and new gas gathering units.

The offshore PCSA covered installing offshore platforms, gas compression facilities and more than 400 kilometres of subsea pipelines.

 

Protracted project timeline

 

The cancelled PCSAs were part of an early engagement process with contractors that Adnoc started following the termination of at least two earlier bidding rounds.

US engineering firm Bechtel completed the project’s original front-end engineering and design (feed) in 2019, with tenders for four EPC packages issued soon after.

Following the submission of commercial bids in early 2021, Adnoc made revisions to the feed as part of an optimisation process started by Technip Energies in November 2021. The revised feed aimed to reduce the scheme’s overall capital expenditure, which was previously estimated to be as high as $15bn.

 

The four original EPC packages were consolidated into two integrated offshore and onshore packages, thought to be worth as much as $5bn and $5.5bn, respectively, based on the previous version of the project.

 

MEED reported in September last year that early engagement contractors had submitted proposals for the detailed engineering work on the Hail and Ghasha development. The January PCSAs are understood to have been issued based on these proposals.