Austrian oil and gas firm OMV has signed an agreement with Lukoil Gulf Upstream, a subsidiary of Russia’s Lukoil, to divest its stake in a sour gas development offshore the United Arab Emirates (UAE).
OMV has agreed the sale of 5% stake in the Ghasha concession to Lukoil for the overall cash consideration of $594 million, less a $100 million transaction fee.
After the sale, Lukoil has increased its share in the concession to 10%, with the remaining partners including ADNOC (55%), Eni (25%), and PTTEP (10%).
The concession covers nine fields and comprises three major sour gas and condensate greenfield development projects.
Development will be progressed in a phased approach using artificial islands and well head towers.
The projects will include the drilling of development wells and the construction of offshore and onshore treatment, processing and transportation facilities for natural gas, condensate, crude oil and sulphur.
ADNOC made the final investment decision (FID) for the Hail and Ghasha Offshore Development project in 2023.
The project aims to operate with net zero carbon dioxide (CO2) emissions, and is set to produce more than 1.5 billion standard cubic feet per day (bscfd) of gas before the end of the decade, contributing to UAE gas self-sufficiency and ADNOC’s gas growth and export expansion plans.
The CO2 will be captured, transported onshore and safely stored underground, while low-carbon hydrogen is produced that can replace fuel gas and further reduce emissions. The project will also leverage clean power from nuclear and renewable sources from the grid.
The carbon captured at Hail and Ghasha will support ADNOC’s wider carbon management strategy.