Business & Finance Club Magazine - Oil & Gas Sector - UAE: Abu Dhabi Gas Development Co, a subsidiary of Abu Dhabi National Oil Co (Adnoc), said yesterday it signed a Dh1.1 billion deal with Al Jaber Energy Services for the early works package on its Shah sour gas development.

The 16-month contract, awarded on March 17, covers the construction of a four-lane dual carriageway asphalt road connecting the Shah area to Liwa road, Abu Dhabi Gas Development, the firm set up by Adnoc to develop the $12 billion Shah sour gas field, said in a statement.

The works also include 27 million cubic metres of cut, fill and levelling works to prepare the site for process, production, sulphur recovery, and utilities and offsites packages, the company said.

In addition, the contract covers preliminary preparation for approximately 40 kilometres of main roads in and outside the plant among other works, according to the statement.

Automation contract

Separately, Abu Dhabi Gas Development awarded the main automation contractor (MAC), contract to Honeywell.

The deal covers engineering, procurement and construction of an integrated digital control system for all units.

The company said the signing of the packages "is the beginning of several other projects that will be launched in the near future."

The $12 billion Shah sour gas field development is essential to help Abu Dhabi meet gas demand in the emirate, which has surged as the government builds gas-fired power stations, desalination plants and develops industries such as petrochemicals.

The project aims at producing 1 billion cubic feet a day of sour - or sulphur-rich - gas and stripping out the sulphur and transporting it to processing and export facilities.

Plans for Shah have been held up due to the technical difficulties linked to developing the field's large reserves of sour gas, which is highly corrosive and more costly and challenging to process as it requires special handling and infrastructure.

In April, US oil major ConocoPhillips withdrew from the development, in which it had planned to be a joint venture partner, to focus on projects yielding short and medium-term revenues.

The Shah project is seen as a long-term contributor to value, ConocoPhillips said at the time.

The Shah development will cover a vast area in Abu Dhabi, stretching from Liwa, an oasis area sitting right on the edge of the Empty Quarter desert, via Habshan to Ruwais on the Arabian Gulf coast.