London Stock Exchange-listed Petrofac, which designs, builds, manages, and maintains infrastructure for the energy industries, has revealed that its Abu Dhabi-based joint venture Petrofac Emirates has been terminated by ADNOC from the $1.65bn (AED6.06bn) Dalma Gas Development Project.
Petrofac Emirates was formed in 2008 as a joint venture between Petrofac and Mubadala Petroleum. In July 2013, Petrofac increased its stake in the JV to 75%, with Mubadala Petroleum having sold the remaining 25% to Nama Project Services, an affiliate of Nama Development Enterprises.
Dalma Gas Development Project is an important part of the Ghasha ultra-sour gas concession, which is an essential element of ADNOC’s strategic objective that aims to make the UAE gas self-sufficient.
Announcing the news of termination from two of the contracts that ADNOC had awarded for Dalma Gas Development Project, it said: “Petrofac is committed to working with ADNOC over the coming weeks to explore alternative options to deliver this project in a way that supports their strategic objectives within the current challenging environment”.
In February 2020, ADNOC had picked Petrofac and Malaysian oil and gas firm Sapura Energy Berhad for two engineering, procurement, and construction (EPC) contracts that covered work on offshore facilities, with Petrofac Emirates’ portion of the scope of work valued at $1.5bn (AED5.5bn).
The Ayman Asfri-led company said that despite the termination, Petrofac will continue to implement its remaining group backlog of around $7bn as planned and it will tender for major contracts in Abu Dhabi.
However, Pertrofac anticipated that the development might have an impact on the timing of the contract awards.
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