Japan and West vie for UAE project
United Arab Emirates, Economics, 7/24/1997

Japanese and Western firms are vying to snatch a major United Arab Emirates gas contract which will tap the Gulf country's immense resources, industry sources and newspapers said.

The Abu Dhabi National Oil Company (ADNOC), which runs the energy sector, has invited bids for the 1 billion US dollar project to develop Habshan field, one of the largest oil fields in the Middle East.

Al Khaleej newspaper, quoting official sources, said Technip of France, Bechtel and FluorCorp of the US, Mitsubishi and Chiyoda of Japan, and other companies are competing for the contract.

"ADNOC has issued tenders for the project, the second phase of a program to develop the onshore gas field," the paper said. ADNOC has already awarded Technip a contract for the front-end engineering and design for the project, which industry sources said would cost around 1 billion US dollars compared with a cost of 1.3 billion US dollars for the first phase.

The second stage will turn Habshan into one of the biggest single-point gas processing plants with a total treating capacity of around three billion cubic feet a day according to ADNOC.

Abu Dhabi, the main oil producer in the UAE, approved the ambitious onshore gas development (OGD) plan in 1991 to exploit its largely untapped reserves of natural gas, both associated with oil and non-associated.

The gas wealth of the emirate is estimated at around 190 trillion cubic feet, the fourth largest in the world after the reserves of Russia, Iran and Qatar.

Abu Dhabi has already completed a project to double its production of liquefied natural gas to 5 m tons to meet the growing needs of its main client, the Japanese Tokyo Electric Power Company (TEPCO).

Industry sources said they expected the contract for the second phase of OGD to be awarded late this year. It involves extraction and separating gas, drilling wells and building pipelines to supply the processing plant.

"There could be a third stage in OGD, as they are several fields that need to be developed," one source said. "Abu Dhabi has taken a decision to fully utilize its gas wealth along with its oil wealth." Abu Dhabi's gas exports amount to less than 10 percent of its crude oil sales but they have steadily grown over the past few years.

From around 1.17 billion US dollars in 1994, its gas exports grew to 1.49 billion US dollars in 1995 and some 1.68 billion US dollars in 1996 according to official figures.

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