Shell won Bab Sour Gas project on sulfur monetization
The Abu Dhabi National Oil Company (ADNOC) selected the super major company Shell to form a joint venture and develop the challenging Bab Sour Gas field in the southwest of the Emirates.
Pending since 2007, this decision comes at a critical time as it may figure out ADNOC process of decision to renew the actual oil and gas onshore concessions in 2014 for the next 30 years.
The offshore concessions of the Emirate will come for renewal in the same way in 2018.
In this context, the choice of Shell amid BP, ExxonMobil, Korean National Oil Company (KNOC) and Total to develop and operate the Bab Sour Gas Project over the next 30 years appears as a school case for the allocation of the concessions next year by ADNOC.
In the Bab Sour Gas joint venture, the partners agreed on sharing the working interest during 30 years whereas:
- Shell 40% is the operator
- ADNOC 60%
Abu Dhabi is running short of gas to supply it consumption for electrical power generation and the feedstock for its petrochemical industry.
In such a context, ADNOC could not continue to postpone the development of the Bab Sour Gas project any longer despite its technical challenges.
Located 150 kilometers southwest of Abu Dhabi City, Bab is one of the largest non-associated gas in the Emirates, unfortunately it contains 15% of hydrogen sulfide.
Considering that ADNOC is planning to produce between 500 and 1 billion cubic feet per day (mmcf/d), the development of the Bab Sour Gas project will generate tonnes of sulfur to be treated in one way or another.
At the final stage of the bidding process, Shell and Total were in the lead with different concepts regarding this sulfur issue.
Total was proposing to re-inject the extracted sulfur into the reservoir, while Shell suggested to export and monetize it.
For this reason, ADNOC preferred Shell solution which in addition is expected to favor the natural gas recovery rate from the reservoir along the 30 years of operations.
CH2M-Hill to complete Bad Sour Gas project pre-FEED
In the meantime, ADNOC awarded the pre-front end engineering and design (Pre-FEED) contract to the engineering company CH2M-Hill in Abu Dhabi.
Through this pre-FEED, CH2M-Hill evaluates two options for the Bab Sour Gas treatment:
- 500 million cf/d,
- 1 billion cf/d
In respect with these scenarios, the Bad Sour Gas project should include a:
- Gas gathering system
- Gas central processing facility
- Gas treatment plant
- Sulfur recovery unit
- Sulfur handling facilities
- Storage facilities
- Offsites and utilities
Regardless the development phases of the Bab Sour Gas project, the facilities should be designed to handle 1 billion cf/d of sour gas.
In this competition, Shell took advantage of it 60 years experience in Sour gas and of the overall focus of its strategy on gas fields development on the last 10 years.
Having submitted to the most attractive technical and commercial offer, Shell is planning to invest jointly to invest $10 billion capital expenditure in Bab Sour Gas.
With Shell and ADNOC to finalize their agreement, the Bad Sour gas project should come on stream in 2020.