The offshore arm of Abu Dhabi National Oil Company (Adnoc Offshore) has initiated commercial negotiations with a consortium of UK-based Petrofac and Italian contractor Saipem for its Umm Shaif gas cap condensate development phase 1 project, according to sources.

In September, MEED reported that the Petrofac-led consortium had emerged as the lowest bidder for the estimated $1.5bn offshore gas development project.

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Adnoc Offshore has adopted a front-end engineering and design to engineering, procurement, construction and installation (feed-to-EPCI) competition model for the project.

“Adnoc Offshore has already held a couple of meetings with the Petrofac / Saipem consortium, during which commercial discussions are understood to have taken place,” one source said.

Adnoc declined to respond when approached by MEED to comment on the matter.

The Abu Dhabi energy major announced in May last year that it had selected the following three entities for the feed-to-EPCI competition, based on their feed submissions:

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  • McDermott (US)
  • National Petroleum Construction Company (UAE) / TechnipFMC (France)
  • Petrofac (UK) / Saipem (Italy)

The feed-to-EPCI contest contracting model involves shortlisting contractors to enter a contest for the feed work. The entity that submits the best feed proposal is then awarded the contract to execute the EPCI works.

Technical bids for the EPCI works were submitted in January this year and commercial bids were submitted by late August.

Umm Shaif gas project

Adnoc has undertaken the project to tap into the Umm Shaif offshore hydrocarbons reserve, as part of its 2030 gas strategy to develop Abu Dhabi’s strategic gas cap resources.

The project is likely to be commissioned in 2023 and will add 500 million cubic feet of gas a day to Abu Dhabi’s gas grid.

The Umm Shaif oil and gas field is located in the Umm Shaif and Nasr hydrocarbons block of Abu Dhabi’s premium offshore concession, previously operated by erstwhile Adnoc group companies Adma-Opco and Zadco.

Between March and April 2018, Adnoc awarded a 10% stake to Italy’s Eni, 20% to France’s Total and 10% to China National Petroleum Corporation in the Umm Shaif and Nasr offshore block, itself retaining the majority 60% interest.

The operators currently produce about 460,000 barrels a day from the Umm Shaif and Nasr block.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.