Delegates tour the pavilion of Adnoc on the 2nd day of Adipec 2018 in Abu Dhabi. Image Credit: Abdul Rahman/Gulf News

Abu Dhabi: Abu Dhabi National Oil Company (Adnoc) says it will invest Dh5.1 billion ($1.4 billion) to upgrade and expand its Bu Hasa field.

The upgrade of the oilfield will increase crude oil production capacity from 550,000 barrels per day (bpd) to 650,000 bpd by the end of 2020, the company said.

An engineering, procurement and construction (EPC) contract has been awarded to Spanish firm Tecnicas Reunidas and the works are expected to take 39 months to complete, Adnoc said on Wednesday.

The development comes as Adnoc plans to ramp its oil production capacity to 4 million barrels per day by 2020 and five million barrels per day by 2030.

“We are on track to meet our production capacity target of 3.5 million barrels of oil per day by the end of this year to 4 million barrels per day by the end of 2020 and this contract is yet another sign of our clear commitment to making smart investments to maximise the value of Abu Dhabi’s oil resources and drive significant In-Country Value, in line with our wise leadership’s directives,” said Dr Sultan Al Jaber, Minister of State and Adnoc Group CEO in a statement.

The asset upgrade and expansion includes new pipeline networks and production hubs, as well as the conversion of three trains in a central degassing station and other related facilities.

In another announcement on Wednesday, Adnoc said it had agreed, in principle, to extend to 2040 its gas supply agreement with Adnoc LNG, in coordination with its partners, Mitsui, BP and Total.

The new gas supply agreement is scheduled to take effect from April 1, 2019, replacing an existing agreement, due to expire on March 31, 2019.

The extension announcement follows the Abu Dhabi’s Supreme Petroleum Council approval of Adnoc’s new integrated gas strategy that will sustain LNG production to 2040 and allow Adnoc to seize growth opportunities and increase its customer base.

“The LNG market is projected to grow at a robust pace, fuelled by demand from Asia and developing countries who want access to a clean and affordable source of energy,” said Abdul Aziz Al Hajri, Director of Adnoc’s Downstream Directorate.

“With over four decades of experience in the LNG market, Adnoc is well-positioned to leverage this opportunity and is now modernising its commercial approach to transition from a single-customer to a multi-customer business that includes a number of global utilities as well as portfolio players and traders.”

Adnoc LNG signed seven term contracts for the supply of more than 4.2 million tonnes per annum (mmtpa) of liquefied natural gas including buyers from Japan.

Adnoc also inked a separate agreement with Mubadala Investment Company to explore together potential global growth opportunities in refining and petrochemicals sector.