Overview of the Bab Gas Cap (BGC) Development

The Bab Gas Cap (BGC) development, led by state-owned Adnoc Gas in Abu Dhabi, is a major project aimed at unlocking three undeveloped gas-cap reservoirs. Output from these reservoirs will be routed to a new facility. The project is in its final stages before a final investment decision (FID), which is expected by 2026, according to Adnoc Gas's chief financial officer. This development is part of a broader capital investment plan through 2029, which includes other large-scale projects like the Rich Gas Development (RGD), IGD-2, Meram, and the Ruwais liquefied natural gas export facility.

EPC Package and Tender Process

At least four leading international contracting groups are poised to compete for an engineering, procurement, and construction (EPC) package worth up to $8 billion for the BGC development. The operator carried out a prequalification process earlier in the year, and tenders are likely to be issued to shortlisted contenders as early as June, though delays due to the geopolitical situation in the region are possible. The BGC gas plant package (Package 1) is the largest of at least four EPC packages, with a workscope that includes both greenfield and brownfield elements.

Pre-Qualified Consortia

Four major consortia are likely pre-qualified for the project:

• A grouping of India’s Larsen & Toubro with South Korea’s Samsung E&A.
• A consortium of French player Technip Energies, China’s Sinopec, and Japan’s JGC.
• A grouping including Italy’s Tecnimont with China Petroleum Engineering & Construction Corporation (CPECC).
• A grouping including Italy’s Saipem, Abu Dhabi’s NMDC Energy, and Middle East-based Consolidated Contractors Company (CCC).

Cost Estimates and Escalations

The gas plant package could be worth up to $8 billion, though the operator has a more modest cost estimate of about $6 billion. Project costs have risen in recent months due to the Middle East conflict, leading to higher logistics and insurance costs. Another source hinted at further cost escalations depending on the security situation in the region.

Workscope Details

The workscope for the BGC gas plant package is significant and involves at least two gas processing trains, each capable of handling more than 900 million cubic feet per day of gas. The greenfield scope includes inlet separation and condensate stabilisation, acid gas removal units, gas dehydration, a natural gas liquid recovery unit, gas compression, sour water treatment, and several related facilities. The brownfield scope includes tie-in facilities, the Habshan sulphur granulation plant, and other key facilities. The BGC project also includes several smaller packages, with expressions of interest (EOIs) launched last year for surface facilities for early works and onshore pipelines.

Location and Strategic Importance

The BGC gas plant is located in the Habshan area, around 170 kilometres from Abu Dhabi. The project is linked to an oil and gas field development in the upstream business and has the potential to produce sizeable condensate volumes. According to Rystad Energy's research director, the flurry of gas projects in the UAE, including BGC, will ramp up gas supply by the late 2020s. Coupled with an active push for alternative energy mixes like solar and nuclear, this will allow Adnoc to reach its gas self-sufficiency target by 2030. Adnoc has also outlined plans to award