To ramp up gas production at Lower Zakum, ADNOC hands out $548 million deal

UAE’s ADNOC Offshore has awarded a $548 million (AED 2.01 billion) contract for a new main gas line at its Lower Zakum field offshore Abu Dhabi, which is expected to almost double the field’s gas production capacity.

While announcing the engineering, procurement and construction (EPC) contract to build a new main gas line at its Lower Zakum field, ADNOC explained on Monday that the field’s gas production capacity was going to increase from 430 million to 700 million standard cubic feet per day (MMSCFD). This supports ADNOC’s plans to enable gas self-sufficiency for the UAE and cater for increasing global energy demand.

Ahmad Saqer Al Suwaidi, ADNOC Offshore CEO, commented: “Lower Zakum is a strategic asset for ADNOC and the UAE and working with our international partners, we will continue to responsibly unlock and maximize value from the field in line with ADNOC’s 2030 smart growth strategy. This award is an important part of the long-term development plan for the field and will help strengthen ADNOC’s position as a leading low-cost and low-carbon provider of energy for customers around the world.”

This EPC contract was awarded to National Petroleum Construction Company (NPCC) after a competitive tender process, according to the UAE player. New job opportunities are anticipated to be created for the UAE nationals by the contractor, providing them with practical exposure to executing EPC contracts. The company underlines that this new pipeline will cater for the increased volume of associated gas produced by the Lower Zakum field as the field’s oil production capacity increases to 450,000 barrels of oil per day by 2025. 

In addition, ADNOC outlines that this project, which will enable the construction of a new subsea pipeline that will run 85 kilometres from Zakum West Super Complex to Das Island, will be completed in 2025. This also includes provisions to construct, install and test a new platform at the super complex as well as a new gas receiving facility at Das Island.

Yaser Saeed Almazrouei, ADNOC Upstream Executive Director, remarked: “This contract award will enable us to produce more gas as we increase production capacity from the Lower Zakum field. This will support our integrated gas masterplan, which is driving competitive gas recovery to enable gas self-sufficiency for the UAE and industrial growth, while also helping to meet the increasing global demand for energy.”

Furthermore, the UAE giant’s gas masterplan links “every part of the gas value chain” to further unlock Abu Dhabi’s gas reserves, enabling domestic gas self-sufficiency, industrial growth and diversification, as well as meeting growing global gas demand. Based on ADNOC’s statement, natural gas is playing an increasingly important role in the energy transition as both a feedstock and a fuel as it burns with significantly lower-carbon intensity than coal. 

“With over 75 per cent in-country value resulting from the award, the project will further stimulate economic growth and create opportunities for the private sector, in line with the UAE leadership’s wise directives,” concluded Almazrouei.

Taking into consideration this award, ADNOC Offshore and its strategic international partners have invested more than $5 billion in recent weeks in the long-term development of Abu Dhabi’s offshore operations. These awards included contracts worth more than $3.4 billion awarded to ADNOC Drilling to accelerate offshore growth activities and a $1.1 billion contract awarded to ADNOC Logistics &Services to enhance offshore operations.

Regarding ADNOC’s most recent activities, it is worth noting that the UAE player and France’s TotalEnergies expanded their strategic alliance in July 2022 to work on exploring opportunities for growth across the energy value chain. TotalEnergies also holds a 5 per cent interest in the offshore Lower Zakum concession.