Adnoc Review

Zadco ... considering awards

Zadco ... considering awards

Zadco eyes onshore development offers

The Upper Zakum expansion is part of Adnoc’s broader plan to expand output capacity by 750,000 bpd to 3.5 mbpd by 2017 from about 2.8 mbpd in 2010

ZAKUM Development Company (Zadco) is considering price offers in the region of $4 billion from five contenders to build onshore facilities for Abu Dhabi’s Upper Zakum (UZ) 750 oilfield expansion project.

Zadco is due to make a decision soon for one of the Gulf’s biggest such contract awards. Zadco’s development of Upper Zakum Field is one of the biggest ongoing projects. The projects facilities are to be installed on four artificial islands that are being constructed and connected to the present facilities to increase oil production to 750,000 bpd by 2017.

The multi-billion dollar job involves up to 150,000 tonnes of modular processing and other related facilities on four artificial islands. Production at Upper Zakum is being expanded to 750,000 barrels per day (bpd) from 520,000 bpd as part of the UAE’s plan to raise overall capacity by a quarter. The higher output level has to be maintained for at least 25 years. The South Korean bidders are Hyundai Heavy Industries and Samsung Engineering & Construction. Sources in the Gulf and Asia said Hyundai has KBR as a partner.

Also bidding are the partnerships of National Petroleum Construction Company (NPCC) with France’s Technip, and Sharjah-based Petrofac with Daewoo Shipbuilding & Marine Engineering.

Key regional player J Ray McDermott is not directly participating in the bidding, but “may come in at a later stage” as a sub-contractor to the winning bidder, according to a source.

The NPCC-Technip partnership already has the $800 million contract for offshore facilities.

The offshore EPC-1 package covers large numbers of pipelines, five riser platforms, flare towers and other work.

Zadco received the technical bids for the onshore EPC-2 package. A source said the tonnage of modular processing facilities has since been reduced to 120,000 tonnes, but this could not be confirmed.

The Upper Zakum field lies more than 80 kilometres off the coast of Abu Dhabi.

The project involves four production islands, with processing facilities at the central island complex. The front-end engineering and design study was carried out by Technip.

Zadco is an Abu Dhabi National Oil Company (Adnoc) subsidiary that includes ExxonMobil in a leading role, as well as Japan Oil Development Company.

Meanwhile, Zadco has finalised a contract with the local National Petroleum Construction Company (NPCC) and France’s Technip for work related to the development of the Upper Zakum oil field offshore Abu Dhabi.

The contract was signed in Abu Dhab by the respective Zadco and NPCC CEOs, Saif Al Suwaidi and Aqeel Madhi.

NPCC, a joint venture between Abu Dhabi state-owned General Holding Corporation (70 per cent) and Greece’s Consolidated Contractors Group (30 per cent), leads the contractor consortium.

The work to be completed under the 36-month contract includes laying about 240 km of under-sea pipelines and 128 km of subsea composite and fibre-optic cables, as well installation of initial production facilities for incremental output from Upper Zakum and modification of existing facilities.

Financial terms were not disclosed in the statement.

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