UAE’s energy producer Abu Dhabi National Oil (ADNOC) has terminated two contracts, worth $1.65bn in total, awarded a Petrofac-led group for the Dalma Gas Development Project located about 190km northwest of Abu Dhabi.

Located in shallow waters of the Persian Gulf offshore Abu Dhabi, the Dalma ultra-sour gas field is 60% owned by ADNOC while other partners include Eni (25%), Wintershall (10%), and OMV (5%).

in February 2020, Petrofac Emirates and a joint venture between Petrofac and Sapura Energy secured the two engineering, procurement (including novated long lead items), construction, transportation, offshore installation and commissioning contracts.

Petrofac seeks to explore alternative options to deliver the Dalma project

Petrofac, which received notice of termination for the two contracts, said it would work with ADNOC in the coming weeks to explore alternative options to deliver the Dalma project.

The firm noted that the revised proposal would support ADNOC’s strategic goals amid the challenging environment.

In a press statement, Petrofac said: “Petrofac continues to progress execution of its remaining Group backlog of around US$7billion as planned and is still progressing with tendering for major contracts in Abu Dhabi. However, it anticipates this development may have an impact on the timing of their awards.”

The first package, which is valued at $1.065bn, was for gas processing facilities at Arzanah island. Petrofac was entailed to provide inlet facilities with gas processing and compression units, power generation units, utilities and other associated infrastructure.

The $591m second package involved offshore facilities, several wellhead platforms, 189km of subsea pipelines, cables and umbilical forming the Dalma Gas Development Project.

ADNOC earlier said that the two contracts would allow the Dalma gas development project to produce around 340 million standard cubic feet per day (mmscfd) of natural gas.

The Dalma project forms part of the Ghasha concession, which includes other oil and gas fields such as Hail, Ghasha, Nasr and Mubarraz.