Abu Dhabi paves the way with sulphur awards

30 December 2010

Award of the Shah gas scheme expected in April

It has been a testing year for executives at Abu Dhabi Gas Industries (Gasco) after its partner US oil major ConocoPhillips withdrew from the Shah gas project.

After being faced with the task of rebuilding the financial case for the estimated $11bn-plus scheme or bring in another international oil company (IOC), Abu Dhabi decided to push on alone.

The partners had planned to produce 1 billion cubic feet a day (cf/d) of raw gas, yielding 540 million cf/d of processed gas for state energy major Abu Dhabi National Oil Company’s distribution network. ConocoPhillip’s delay in making a final investment decision has already cost them a year. Further delays will have an impact on the emirate’s domestic supply programme.

Abu Dhabi is keen to make up for lost time, and the project is now gathering pace. After submitting bids in October, France’s Techint has been selected to build a new sulphur handling facility at Ruwais. In November, India’s Dodsal emerged as the low bidder for a deal to build a similar facility at Habshan in the southwest of the emirate. Only the Shah scheme is left, with an award expected in April. 

The awards pave the way for another grand scheme in the UAE. Federal rail company, Union Railway is planning the 264km first phase of its $11bn railway to transport granulated sulphur between the Shah and Habshan gas fields, and on to Ruwais on the Gulf coast.

By incorporating industrial projects into the scheme, Union Railway has set a template for the regional development of rail projects. The line will support Adnoc’s ongoing production programmes at Shah and Habshan. Later phases will contribute significantly to the development of the oil, natural gas and petrochemical industries in the UAE.

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