Two contracts were awarded to South Korea’s Samsung Engineering by Abu Dhabi National Oil Company worth $3.5 billion to help process other crude grades as the company looks to free up its flagship Murban grade for export markets.
Adnoc said in a statement that the first contract which is worth $3.1bn will enable Samsung to process 420,000 barrels per day of crude sourced from the offshore Upper Zakum concession, and grades of a similar nature from the market, the second $473m contract will recover water and power and is set to generate 230MW electricity and 62,400 cubic metres of water per day by capturing waste heat using closed-cycle power generation technology.
Dr Sultan Al Jaber, group chief executive of the Adnoc Group said "As Adnoc continues to deliver on its 2030 smart growth strategy, a number of new and exciting opportunities exist across our value chain, particularly in the downstream, which offer the potential to deepen and develop the longstanding relationship between Adnoc and its Korean counterparts,”
The fourth-largest oil producer in the Middle East, The UAE, is set to announce a downstream strategy soon, as it looks to profit more from the sale of products. Abu Dhabi, which produces much of the country’s oil and gas and accounts for 6 per cent of global crude reserves, aims to double refining and triple petrochemical capacities by 2025.
UAE reduced allocations of Murban by 25 per cent in January in order to comply with the Opec-led restrictions on output to help boost prices and lower inventory levels, following the oil price slump of 2014.
Japan and Thailand are the biggest buyers of Murban crude, with smaller buys from other Asian consumers such as Taiwan and Sri lanka, said Mr Nasseri.
Japan's 10 per cent current import of crude is Murban with Asia's second-largest economy importing around 200,000 bpd of Murban last year, with similar volumes bought by Thailand, data from FGE shows.
Mr Nasseri said that the award to the South Korean contractors comes amid plans at the refinery to have capabilities to process heavier, more sulphurous blends such as Upper Zakum.
The company said that the engineering, procurement and construction (EPC) work on the Ruwais refinery West complex is set for completion by 2022,
The waste heat project, designed to lower the company’s environmental impact is targeting a 2023 completion timeline.
Abu Dhabi’s state oil company is currently engaged in a lot of upstream activity offshore the emirate, awarding concession stakes to European oil majors such as France’s Total and Italy's Eni as well as exploration and production firms from its traditional market base in Asia.
As Adnoc continues to split the erstwhile Adma-Opco entity while retaining a 60 per cent stake, its engagements with its new partners will look to evolve into possible downstream collaboration.
Patrick Pouyanne, Total chief executive whose company won $1.45bn worth of stakes in the twin oil and gas concessions of Umm Shaif and Nasr as well as Lower Zakum, told The National earlier this month that he was in talks with Adnoc to help the company “expand in the downstream."