ADNOC AWARDS AUSTRIA’S OMV 5% STAKE IN GAS CONCESSION
▶ The energy company joins Italy’s Eni and Germany’s Wintershall on the Ghasha project
Abu Dhabi National Oil Company has awarded Austrian energy firm OMV a 5 per cent stake in the Ghasha concession, the third foreign partner for the ultra-sour gas project.
OMV, which is partly owned by Mubadala Investment Company, joins fellow European energy entities Italy’s Eni and Germany’s Wintershall as partners on the concession, Adnoc said yesterday. The company will contribute 5 per cent to the project capital and operational development expenses.
Adnoc did not reveal the value of the deal.
“This agreement builds on, and extends, our strong partnership with OMV, who we collaborate with in key areas across the oil and gas value chain,” said Adnoc Group chief executive Dr Sultan Al Jaber. “They bring extensive experience in sour gas operations, in Austria and Pakistan, and, like Adnoc, have a proven record working with mature and complex reservoirs.”
Adnoc, which produces much of the UAE’s oil, said last month it discovered large hydrocarbon deposits equivalent to 1 per cent increase to existing oil reserves and a 7.1 per cent addition to proven gas reserves. The company also plans to boost its investment spend to ramp up oil output capacity to 5 million barrels per day by 2030 from about the current 3 million bpd.
The Ghasha project is expected to produce over 1.5 billion cubic feet of gas per day when it comes on stream, which Adnoc said could be in the middle of the next decade. The project is also expected to produce over 120,000 bpd of crude and high value condensate.
The gas generated would be sufficient to power more than two million homes, Adnoc said.
The deal is the second signed between OMV and the Abu Dhabi state producer this year.
The Austrian company bought stakes in two blocks offshore for $1.5 billion in Abu Dhabi’s Sarb and Umm Lulu fields.
The state producer also awarded French company Total a 40 per cent stake in the Ruwais Diyab concession in November. The agreement, which has a 40-year production term includes a six to seven-year exploration and appraisal phase. Adnoc is also pursuing the development of its onshore Shah gas field, where it plans to increase production to 1.5 bcf. Plans are also under way to increase production capacity from the sour gas fields of Bab and Bu Hasa.
Sour gas contains high levels of sulphur that has to be stripped to produce gas suitable for consumption. Condensate is a liquid similar to oil found with gas, and fetches a higher price as it is easier to refine into by-products. Much of the gas reserves in Abu Dhabi are sour in nature.
In November, Adnoc awarded Spanish company Tecnicas Reunidas a Dh5.1 billion contract to expand Bu Hasa, the emirate’s largest onshore field.
OMV, in which Mubadala owns a 25 per cent stake, holds 36 per cent interest in chemicals firm Borealis, in which the Abu Dhabi producer has a 64 per cent interest.
Borealis and Adnoc in turn are joint investors in the UAE’s biggest chemicals firm Borouge.
The Abu Dhabi chemicals company announced the beginning of construction work on its fifth polypropylene unit located at its third plant in the Ruwais facility.
The development is set to boost polypropylene capacity by more than 25 per cent to 2.24 million tonnes per year. Polypropylene is a vital petchems product that is a basic in the plastics industry and is in increasing demand from consumer markets in Asia, notably India and China.