Royal Dutch Shell PLC reported it has decided to exit the joint development of the Bab sour gas reservoirs with Abu Dhabi National Oil Company (ADNOC) in Abu Dhabi, and to stop further joint work on the project. Shell’s decision, it said, follows “a careful and thorough evaluation of technical challenges and costs.” It added the evaluation concluded that the project’s development “does not fit with the company’s strategy, particularly in the economic climate prevailing in the energy industry.”
ADNOC picked Shell in April 2013 as its partner to develop sour gas reservoirs in giant Bab gas-condensate field 150 km southwest of the city of Abu Dhabi (OGJ Online, Apr. 30, 2013).
ADNOC said at the time that the Bab megaproject would include the installation of a gas processing and treatment plant, including a gathering system and sulfur-recovery facilities, able to process 1 billion scfd of sour gas. It said the complex would yield 520 MMscfd of sales gas for delivery to the domestic distribution network by 2020.
ADNOC holds 60% interest in the venture, while Shell held 40%.