Shah will have world's longest sulphur pipeline
Abu Dhabi is expected to construct the world's longest sulphur pipeline as part of a multi-billion-dollar project to develop its giant Shah gas field near the Saudi border, industry sources said yesterday.
The US-based Fluor Corporation has completed the front-end engineering and design (Feed) work on the project, which is expected to be launched this year and completed within five years.
"We have completed Feed work within 18 months and EPC [engineering, procurement and construction] packages are expected to be awarded in the next period," a Fluor source told Emirates Business.
"The project is massive as it will meet a large part of the country's gas needs but its costs are expected to be high as well, because all the gas is sour. It will involve the world's longest liquid sulphur gas pipeline of about 300km," he said.
The pipeline will transport about one billion cubic feet of gas to the Ruwais processing facilities south of Abu Dhabi. Industry sources believe the project will cost in excess of $10 billion (Dh36.72bn) given the topography of the field and the high sulphur concentrations in the gas. But they said costs were in the range of $13bn to $14bn in 2008 when construction materials and contracting expenses were at their peak.
"It is still a very expensive project. That is why Adnoc [Abu Dhabi National Oil Company] has decided to break the lump sum contract into separate packages," one source said.
Located about 10km from the Saudi border, the Shah field covers about 400 square km and is believed to contain massive gas deposits, most of which are sour gas with high sulphur content. Given its proximity to the border, a small portion of the reserves could be located on the Saudi side, according to the sources.
"I think the development of this field is vital for Abu Dhabi and the whole of the UAE as they need more gas given the rapid growth in consumption. I am sure it will meet a large part of the country's gas requirements when it is completed, probably within five years," one source said.
The Shah project is a joint venture between Adnoc and the US-based ConocoPhilips. Its initial output target is about one billion cubic feet of gas per day. Said Ahmed Al Ghafli, Chief Executive of the joint venture company, said last week that safety remains a key concern for the developers due to the high sulphur component. "The JV will pursue the development of a world-class facility that can process one billion cubic feet per day of very sour gas containing some 23 per cent of hydrogen sulphide," he said.
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.