Abu Dhabi: Around $21 billion (Dh77 billion) worth of EPC (Engineering, Procurement and Construction) projects will be awarded in the UAE in the coming 6-9 months, a senior executive of a French company said here yesterday at an industry conference.
Arturo Grimaldi, Senior Vice President-Middle East for Technip, which provides engineering, technologies and project management for the oil and gas industry worldwide, said that around $25 billion worth of EPC projects have been awarded in the UAE and Saudi Arabia in the past nine months despite the global financial crisis.
"Around $40 billion worth of EPC contracts will be awarded in Qatar, Saudi Arabia and Kuwait in the coming three years," said Grimaldi.
He said Saudi Arabia is pushing for gas and downstream (refining and petrochemical) projects.
"Almost all the planned projects in the GCC [Gulf Cooperation Council] countries will be awarded within the next three years, then the peak will bottom," said Grimaldi.
Meanwhile, a senior Abu Dhabi Zakum Development Company (Zadco) official has said the oil and natural gas exploration and production company plans to award around $4 billion (Dh14.6 billion) in engineering, procurement and construction (EPC) contracts over the next 18 months.
"There are four major packages and there are three packages still to be tendered," the Zadco official said, adding the tendering will be next year and will be in phases.
Zadco's mandate is to develop the Upper Zakum field on behalf of Abu Dhabi National Oil Company (Adnoc).
Zadco is a joint venture of Adnoc, ExxonMobil, and Japan Oil Development Company. Besides Upper Zakum, the company operates the Umm Al Dalkh and Satah fields.
In May, the chief executive officer of the UAE's state-owned Adnoc said the company plans to award projects worth up to $50 billion in 2009-2010.
Yousuf Omar Bin Yousuf said at the time that 2009 will be one of the most difficult years in the world economy due to the recession and shortage of liquidity.
"This financial crisis caused many companies and countries producing or consuming energy to downsize and economise. Consequently this led to weakness in world demand and a decrease in oil prices, leading to problems in expansion and execution of projects," said Bin Yousuf.
"However in Adnoc we look at the bright and positive side... to execute our giant projects at lower cost and better quality," he added.
Construction projects
What's EPC?
EPC stands for Engineering, Procurement and Construction.
It is a common form of contracting arrangement within the construction industry. Under an EPC contract, the contractor will design the installation, procure the necessary materials and construct it, either through own labour or by subcontracting part of the work.
The contractor carries the project risk for schedule as well as budget in return for a fixed price, called Lump sum or LSTK depending on the agreed scope of work.
When scope is restricted to engineering and procurement only, this is referred to as an EP or E+P contract.
This is often done in situations where the construction risk is too great for the contractor or when the owner has a preference for doing the construction himself.
