Australian firm completes sulphur transport studies for Shah scheme

21 April 2010

ConocoPhillips and Adnoc yet to make a decision on best way to transport sulphur

Australia’s WorleyParsons has completed a comparative study of the two sulphur transport options for the $10bn-plus joint venture Shah gas development in Abu Dhabi, although the partners behind the scheme are yet to make a final decision on the best path to follow.

Abu Dhabi National Oil Company (Adnoc) and the US’ ConocoPhillips want to produce 1 billion cubic feet a day of sour, or sulphur-rich, gas from the Shah field, before separating the sulphur from the natural gas and transporting both to processing and distribution facilities at Habshan and Ruwais.

The partners are considering two different ways of transferring the 7 million tonnes a year (t/y) of sulphur: a technically complex pipeline which would transfer the sulphur as a liquid heated to 120-140 degrees centigrade, and a railway which would transport the chemical in a granulated pellet form.

The US’ Fluor has been working on additional engineering design work for the pipeline since July 2009, and UAE federal firm Union Railway has been working on a feasibility study for the rail scheme since at least October 2009 (MEED 16:10:09).

Both US rail company Wilbur Smith and US engineering firm Bechtel have been helping the Union Railway on its study.

Sources close to the project tell MEED that WorleyParsons was asked to work on a comparative study of the two transport schemes in early 2010, and presented its findings to the partners on 31 March, although they are yet to reach a decision on the best way to move forward. They were originally scheduled to decide on the final scope of the project by the end of 2009.

“Adnoc and Conoco will make their decision on the basis of the report,” says one source with close links to the management of the scheme. “No-one is sure exactly what is in it, but it will be crucial to what happens next.”

Although the partners have tendered five major engineering, procurement and construction (EPC) contracts on the project to date, they must wait until they have made a decision on the transport scheme before they can finalise the scope on two other deals and award two project management consultancy (PMC) deals to oversee the EPC contractors.

If they choose to use the technically complex pipeline, they will have to tender a deal to build this element of the project and another contract, which covers the construction of a sulphur handling terminal at Ruwais to process and distribute the sulphur.

However, if they choose the railway, they will have to tender separate deals to build a sulphur granulation plant at Shah and modified handling facilities at Ruwais, while Union Railway will tender the construction contracts for the rail scheme.

Three US firms are in the running for the PMC deals: Bechtel, Fluor, and Veco. They have all been asked to extend the validity of their bids on the contracts until the end of April, after submitting final bids in January.

“Everyone is waiting and waiting for them to come to a decision on the transport, on the PMCs, and then on the EPC contracts, and to tender the remaining deals,” says a business development executive at one firm bidding on the scheme.”We really hope they make some decisions by the end of April or in early May, because this is really dragging on.”

MEED reported in early April that Conoco would not make final investment decisions decision on the Shah scheme or its joint venture $10bn refinery with Saudi Aramco at Yanbu until May at the earliest (MEED 2:4:10).

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