Italy’s Saipem wins $3.5b Abu Dhabi contracts

DUBAI — Saipem SpA, Europe’s biggest provider of oilfield services by market value, won about $3.5 billion in contracts for gas processing and sulfur recovery at a field in Abu Dhabi, a person familiar with the situation said.

By (Bloomberg)

Published: Sat 1 May 2010, 10:45 PM

Last updated: Mon 6 Apr 2015, 5:05 PM

The company won three contracts with Abu Dhabi’s state oil producer said the person, who asked not to be named because he wasn’t authorised to speak. Samsung Engineering Co secured a separate contract for $1.5 billion, the company said on Friday.

Saipem’s contracts are for $1.9 billion for gas processing, $1.45 billion for sulfur recovery and $196 million for product pipelines, according to the person. Samsung will build utility and offsite facilities needed for the project.

Abu Dhabi National Oil Co, the state-owned oil and gas producer known as Adnoc, is pressing ahead with the Shah sour-gas project after ConocoPhillips pulled out of the joint venture this week.

Abu Dhabi needs to develop its sour, or high-sulfur, gas reserves as domestic power consumption soars.

Development at Abu Dhabi’s Shah field is estimated to cost $10 billion, Saif Ahmed al-Ghafli, chief executive officer of the project, said in March. Shah will process 1 billion cubic feet (28 million cubic metres) of sour gas, or natural gas containing significant amounts of hydrogen sulfide, a day into more than 500 million cubic feet of fuel and 10,000 tonnes of sulfur, he said.

Shares gain

Saipem rose as much as 4.2 per cent in Milan and traded at €28.90 at 2:01p.m., up 3 per cent.

That was the biggest gain on Italy’s benchmark FTSE MIB index and on the Bloomberg EMEA Oil and Gas Services Index, which added 1.3 per cent. Samsung Engineering gained 1.4 per cent in Seoul.

A group made up of Tecnicas Reunidas SA and Punj Lloyd Group Lloyd also won a joint award of $463 million for gas gathering in the project, according to the person.

A spokeswoman for Saipem in Rome declined to comment.

Fluor Corp. and CH2M Hill Cos unit Veco Corp signed project management contracts for the Shah project on Thursday, the person familiar with the situation said. Fluor officials couldn’t be reached for comment on Thursday.