The Bab Gas Cap concession has been awarded with ADNOC holding 60 per cent alongside TotalEnergies, bp, CNPC, JODCO/INPEX, ZhenHua and GS Energy. The development targets 1.5 billion cubic feet a day and is aimed at domestic supply and petrochemical feedstock.
The Bab Gas Cap concession in Abu Dhabi has been awarded to a group led by ADNOC with 60 per cent, alongside TotalEnergies and bp at 10 per cent each, CNPC at 8 per cent, JODCO/INPEX at 5 per cent, ZhenHua at 4 per cent and GS Energy at 3 per cent. The concession is operated by ADNOC Onshore and targets a production rate of 1.5 billion cubic feet a day.
The development covers three reservoirs in the Bab field, one of Abu Dhabi's largest onshore oil fields, and involves co-production of gas and condensate. It has been described as the largest gas cap development of its kind globally.
A gas cap is the volume of gas sitting above the oil in a reservoir, held in place by pressure. Producing it is technically delicate for a straightforward reason: the gas cap helps drive the oil towards the wells, and depleting it too quickly can reduce the ultimate recovery from the oil leg beneath. Developing a gas cap in a field that is still producing oil therefore requires reservoir management that balances two objectives which pull against each other.
That is the engineering interest. The strategic interest is what the gas is for. The Emirates has been pursuing gas self-sufficiency, and the Bab volumes are aimed at domestic supply, industrial and petrochemical feedstock, and supporting ADNOC's plans to expand liquefied natural gas exports.
The partner structure is worth reading as well. Seven equity holders spanning European, Chinese, Japanese and Korean companies is a deliberately broad group, and it reflects how concession awards in Abu Dhabi have been used to build commercial relationships with the markets that buy the output as much as to raise capital.
The construction consequence follows the production target. Delivering 1.5 billion cubic feet a day of processed gas requires wells, gathering networks, processing trains, compression, condensate handling and connection into the national gas grid. That is a multi-year onshore engineering programme in the same period as Qatar's North Field expansion and Saudi Arabia's Jafurah development, competing for the same contractors, the same fabrication capacity and the same long-lead equipment.
The concession builds on the 2015 renewal of the onshore oil concession, and the agreement was announced in June.
Condensate is the part of the output that is easy to overlook and awkward to handle. Co-producing it with gas means stabilisation facilities, storage and a route to a refinery or export terminal, and its value moves with crude rather than with gas. For a development sized at 1.5 billion cubic feet a day the associated liquids are a substantial stream in their own right, and they are usually what makes the economics of a gas project work at gas prices that would not justify it alone.