ADNOC awards $245m EPC contracts to upgrade oil lines, terminal
The successful bids by the two contractors prioritised UAE sources for materials, as well as local suppliers and workforce
ADNOC Onshore, a subsidiary of the Abu Dhabi National Oil Company (ADNOC), has awarded two Engineering, Procurement, and Construction (EPC) contracts with a combined value of approximately $245m (AED899.9m) to China Petroleum Pipeline Engineering Company Limited – Abu Dhabi and Abu Dhabi-based Target Engineering Construction Co LLC.
The contracts will include upgrading two main oil lines (MOLs), and crude receiving facilities at the Jebel Dhanna terminal in the emirate of Abu Dhabi.
The EPC contract awarded to China Petroleum Pipeline Engineering Company Limited – Abu Dhabi is valued at approximately $135m (AED496.8m) and the scope is to replace the two MOLs which transport ADNOC’s premium grade Murban crude oil from its oilfields at Bab (BAB), Bu Hasa (BUH), North East Bab (NEB), and South East (SE) to the Jebel Dhanna terminal, increasing the capacity of the pipelines by more than 30%.
The contract is expected to be completed in 30 months and will see more than 45% of the award value flow back into the UAE’s economy under ADNOC’s ICV programme.
The EPC contract awarded to Target Engineering Construction is valued at approximately $110m (AED403.7m) and will see the contractor upgrade the crude receiving facilities at the Jebel Dhanna terminal, enabling ADNOC to utilise parts of the terminal’s existing facilities to import Upper Zakum (UZ) crude oil from offshore and Non-System (NS) crude, for delivery to the new Ruwais Refinery West (RRW) project, located approximately 12km to the east of Jebel Dhanna terminal.
When complete, the ability to import other grades of crude at Jebel Dhanna will provide ADNOC greater flexibility, enabling the company to extract value from every barrel of crude it produces. The terminal was originally conceived and operated as a Murban crude oil export facility at its inception in the 1960s.
The contract is expected to be completed in 20 months and will see more than 60% of the award value to Target Engineering flow back into the UAE’s economy under ADNOC’s ICV programme.
As part of the selection criteria for the awards, ADNOC carefully considered the extent to which bidders would maximize ICV in the delivery of the project. This is a mechanism integrated into ADNOC’s tender evaluation process, aimed at nurturing new local and international partnerships and business opportunities, fostering socio-economic growth, and creating job opportunities for UAE nationals.
The successful bids by the two contractors prioritised UAE sources for materials, local suppliers, and workforce.
More than 50% of the total award value will flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) programme, as ADNOC looks to prioritise ICV in its smart growth pursuit to maximise value from its assets and deliver sustainable returns to the UAE.
Commenting on the contract award, the executive director of ADNOC’s Upstream Directorate, Yaser Saeed Almazrouei, said: “The EPC contracts awarded by ADNOC Onshore will increase the capacity of the two main oil lines and upgrade the Jebel Dhanna terminal to enable it to receive Upper Zakum and Non-System crude for delivery to the Ruwais Refinery West project.
“The awards follow a very competitive tender process and highlight how ADNOC is making smart investments to optimise performance and unlock greater value from our assets.”