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Abu Dhabi, UAESaturday 15 December 2018

Adnoc awards Germany's Wintershall 10% stake in sour gas project

Wintershall is the second company to be awarded a stake in the multibillion dirham concession after Eni of Italy

“Development of the Ghasha concession area is a strategic priority for Adnoc,” said Dr Sultan Al Jaber, Adnoc group chief executive. Adnoc
“Development of the Ghasha concession area is a strategic priority for Adnoc,” said Dr Sultan Al Jaber, Adnoc group chief executive. Adnoc

Abu Dhabi National Oil Company awarded Germany’s biggest energy producer Wintershall a 10 per cent stake in the Ghasha ultra sour gas concession, the second foreign player to come on board the multibillion dirham project.

Wintershall, which is a unit of the world’s biggest chemical producer BASF, will contribute to 10 per cent of the cost of the 40-year concession, Adnoc said in a statement on Monday. When the project is complete, more than 1.5 billion cubic feet of gas will be produced per day in addition to more than 120,000 barrels of condensate per day.

It is the first German company to win a Abu Dhabi concession. In an interview with The National earlier this month, Wintershall chief executive Mario Mehren said Wintershall, which had tested and appraised two wells in the Shuwaihat region, was looking at possible tie-ups with larger sour-gas fields in the Hail, Ghasha concessions. Wintershall, which is currently in the process of merging with Russian-owned DEA, has 40 years of experience working in sour-gas fields in Germany.

Sour gas contains higher sulphur that has to be stripped to produce gas suitable for consumption. While condensate is a liquid similar to oil found with gas, but fetches a higher price as it is easier to refine into by-products. Much of the gas reserves in Abu Dhabi are sour in nature.

“Development of the Ghasha concession area is a strategic priority for Adnoc,” said Dr Sultan Al Jaber, Adnoc group chief executive. “The gas, extracted from the concession area, at commercial rates, will make a significant contribution to fulfilling our commitment to ensuring a sustainable and economic gas supply and achieving our objective of gas self-sufficiency for the UAE.”

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Earlier this month, Adnoc awarded Eni of Italy a 25 per cent stake in the Ghasha concession and is looking for partners for the remaining stake in which it will retain a 60 per cent interest.

The UAE is increasingly pivoting to gas as it frees up more crude for exports. Abu Dhabi’s Supreme Petroleum Council approved a five-year capital expenditure plan of Dh486 billion earlier this month for the Adnoc to increase capacity, unlock its sour gas caps, and develop and acquire downstream capabilities at home and abroad.

The Ghasha concession consists of Hail, Ghasha, Dalma and other offshore sour-gas fields, including Nasr, SARB and Mubarraz.

Adnoc is also increasing output from the onshore Shah gas field to 1.5 billion cubic feet per day, and will develop the sour fields at Bab and Bu Hasa, it added.

The UAE, which accounts for 3.1 per cent of global proven reserves of natural gas, announced it had found 15 trillion cubic feet of gas in existing and untapped blocks earlier this month. The discoveries will add 7.1 per cent to existing reserves of gas, which stood at around 209.7 trillion cubic feet at the end of 2017, according to the latest BP Statistical Review of World Energy.

Earlier this month, Adnoc awarded French oil major Total a 40 per cent stake in an unconventional gas concession and has received interest from other foreign oil and gas firms to develop these reserves.

Adnoc also plans to award its first licensing round for oil and gas in the first quarter of next year, offering up to six blocks to international companies.

Adnoc announced a string of deals and agreements during the Abu Dhabi International Petroleum Exhibition and Conference that took place in the capital earlier this month. The oil and gas company signed an agreement with Saudi Aramco, the world’s biggest crude producing company, to explore investments in natural gas and liquefied natural gas as the two look to expand their revenue base.

Adnoc also joined hands with Abu Dhabi’s strategic firm Mubadala Investment Company to explore downstream investment opportunities across the globe.