Abu Dhabi: The Abu Dhabi National Oil Company (Adnoc) yesterday awarded two major contracts worth over $3.5 billion (Dh12.85 billion) to South Korean firm Samsung Engineering as the oil company moves to grow its refining capability and expand its petrochemical production to meet growing demand.

The two contracts signed by Adnoc Refining, a wholly-owned subsidiary of Adnoc, and Samsung Engineering include a $3.1 billion project to introduce crude oil processing flexibility and $473 million project to recover power and water — both at the Adnoc-owned Ruwais oil refinery.

The awarding of the deals coincides with the visit of South Korea’s President Moon Jae-in to the UAE.

In a statement, Dr Sultan Ahmad Al Jaber, UAE Minister of State and Special Envoy for Energy and Climate Change and CEO of Adnoc, said the awarding of two major Engineering, Procurement and Construction (EPC) contracts reinforces the strong business relationship that exists between the UAE and Korea.

“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 [sector], which offer the potential to deepen and develop the long-standing relationship between Adnoc and its Korean counterparts,” he said.

Korean companies are already active in the UAE. In the upstream sector, Korea’s GS Energy was awarded a 3 per cent stake in the Adnoc Onshore concession, while Korea National Oil Corporation (KNOC) and GS Energy hold a 40 per cent stake in the Al Dhafra Petroleum concession area, where the first crude oil production is expected in 2019.

The crude oil processing flexibility project will enable Adnoc’s Ruwais Refinery-West complex to process up to 420,000 barrels per day of Upper Zakum crude, or similar crude types from the market. The project is scheduled to be completed by the end of 2022.

The other project related to power and water will generate an additional 230 megawatts (MW) of electricity for sale and 62,400 cubic metres of water daily by capturing waste heat. It is scheduled for completion by the end of 2023.

Adnoc is making significant investments in new downstream projects to grow its refining capability and expand its petrochemical production three-fold to 14.4 million tonnes per annum (mtpa) by 2025.

Planned projects also include a world scale naphtha cracker, as well as investments in new refinery capacity. and the creation of one of the world’s largest integrated refining and petrochemical complexes at Ruwais.

Meanwhile, Adnoc Refining carefully reviewed the In-Country Value (ICV) component of all bids submitted for both of the awarded contracts, the company said, adding that Adnoc’s ICV strategy seeks to stimulate private sector partnerships and opportunities resulting from Adnoc’s 2030 growth strategy,

“ICV emphasis is likely to be an increasingly significant factor of success in most GCC countries and the Middle East as a whole. Contractors will have to rethink many core processes to prioritise how best to benefit the local economy directly and as a priority of EPC projects,” Jaafar Al Taie, managing director of Manaar Energy Group, told ‘Gulf News’.