x Abu Dhabi, UAE Thursday 20 July 2017

Petrofac awarded Bab field contract

Petrofac Emirates has won a US$500 million contract to expand gas compression facilities at the Bab field in Abu Dhabi.

Petrofac Emirates has won a US$500 million contract to expand gas compression facilities at the Bab field in Abu Dhabi.

The company, a joint venture between the Sharjah-based Petrofac and the government-owned Mubadala Petroleum, will upgrade three existing compressor stations and install a fourth.

The project will add to the gas processing capacity at the Abu Dhabi Company for Onshore Oil Operations (Adco), the emirate's main oil concession.

Increased gas handling capacity at the Abu Dhabi National Oil Company (Adnoc)-led consortium comes as natural gas is gaining in importance to the national economy.

Abu Dhabi is scrambling to boost its gas supplies to enable the growth of a domestic industrial base, and keep up with rapidly growing consumption of power and water.

"The gap between supply and demand must be addressed," said Mohammad Sahoo Al Suwaidi, the director general at Adnoc's gas directorate, at the EIC Connect conference held in Abu Dhabi yesterday. For Petrofac, the contract is welcome news after it dampened expectations for profit growth this year as a consequence of the terrorist attack on the Salah gas project in Algeria.

The company said last month that it expected only "modest" profit growth this year.

The company remains optimistic about meeting its target of doubling revenues between 2010 and 2015, however. Even prior to the Adco contract, London-listed Petrofac boasted a record order backlog of US$12.1 billion, according to the company.

Much of this backlog lies in Abu Dhabi, where Petrofac has recently secured two lucrative contracts. The company is part of a $2.8bn project by an Adnoc subsidiary to increase offshore oil production at the Satah al Razboot (aka Sarb) field by 100,000 barrels per day (bpd), where plans include the creation of a falcon-shaped artificial island.

Last month, another Adnoc subsidiary awarded a $3.7bn package to develop the Upper Zakum megafield to Petrofac Emirates and Daewoo Shipbuilding & Marine Engineering. The contract is one of two packages that will boost production at the field by 250,000 bpd.

These deals are part of a raft of oil and gas contracts by Adnoc, as it is moving ahead with its efforts to increase the emirate's oil output from 2.8 million to 3.5 million bpd.

The national oil company's drive to ramp up production draws heavily on local companies. Alongside Mubadala and Petrofac, National Petroleum Construction Company is another government-controlled company that has won significant deals in Abu Dhabi's energy sector this year.

 

fneuhof@thenational.ae