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ADNOC awards $1.36bn contract for construction of artificial islands

07/02/2019
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The Abu Dhabi National Oil Company (ADNOC) has awarded a $1.36bn contract to the UAE’s National Marine Dredging Company (NMDC) to build multiple artificial islands in the first phase of development of the Ghasha Concession.
An artificial island at the Zakum Offshore Field which was constructed by the National Marine Dredging Company.
(An artificial island at the Zakum Offshore Field which was constructed by the National Marine Dredging Company. Image via NMDC).

Under the terms of the contract NMDC will undertake dredging, land reclamation and marine construction to create 10 new artificial islands and two causeways, as well as expand an existing island, Al Ghaf. The project is expected to take 38 months to complete and will provide the infrastructure required to further develop, drill and produce gas from the sour gas fields in the Ghasha Concession.

At peak construction, the project is expected to employ over 3,500 people.

The Ghasha sour gas fields, as well as the nearby Hail field, offshore Abu Dhabi have a planned production capacity of 1 Bcf/d of sour gas in addition to more than 120,000 barrels per day of oil and condensate. The development of the fields is expected to increase the UAE’s domestic gas production by as much 18%. The gas produced will be used for power generation and domestic gas markets within UAE.

ADNOC recently awarded stakes in the Ghasha Concession to Italy’s Eni (25 percent), Germany’s Wintershall (10 percent) and Austria’s OMV (5 percent). 
It is expected that the construction of artificial islands will accelerate the development of the UAE's Ghasha Concession.
Why artificial islands?

Whilst the construction of artificial islands may seem like a grand undertaking, ADNOC have opted for this option as artificial islands can provide significant cost and environmental benefits, particularly in the shallow waters of the Ghasha Concession. The construction of artificial islands enables oil producers to utilise lower-cost land-drilling rigs instead of high-cost offshore jack-up drilling rigs. The islands also provide greater flexibility for extended reach drilling when compared to offshore rigs. 

ADNOC has already used this technique to exploit other fields, having constructed four artificial islands for the Upper Zakum expansion project. The Upper Zakum field is the second-largest offshore oil field and the fourth-largest oilfield in the world.

The names of the new islands to be constructed were drawn from pearl diving sites in the area and reflect the rich history and culture of the region. They are Ghanem, Sawalem, Chananiz, Mudaifena, Reeah, Seebeh, Seemeh, Shalhah, Jzool and Duroob. The pearl diving tradition is tightly woven into the UAE culture and dates back around 7,000 years ago, long before oil was discovered in the country.

Local economic benefit

A major element of the contract award by ADNOC was the extent to which bidders would maximise in-country value in the delivery of the project. This was evaluated through a mechanism integrated with ADNOC’s tender evaluation process, aimed at nurturing new local and international partnerships and business opportunities, catalysing socio-economic growth and creating job opportunities for UAE nationals. The successful bid by NMDC prioritised UAE sources for materials, as well as the use of mostly local suppliers, manufacturers and workforce, resulting in a total spend of over AED 3.62 billion (almost $1 billion). NMDC will also work with international partners to deliver the project.

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Tags: Oil & Gas
Recent Comments
I'm Interested, Please provide email to forward my CV too. Thanks, Llewellyn
Llewellyn Gouws, 08 February 2019
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ADNOC awards $1.36bn contract for construction of artificial islands - Time to read 3 min
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