UAE to sign Shah deal ‘within week’
The United Arab Emirates will sign a contract to develop sour gas reserves
at the Shah field within a week, an official at state-owned Abu Dhabi
National Oil Company (Adnoc) said today.
Adnoc sources told Reuters in February that US supermajor ConocoPhillips had
won the project to develop sour gas at the Shah field, which has a price tag
of over $10 billion. ConocopPhillips and Adnoc have yet to make an official
announcement on the contract.
The project was the largest upstream project in the past year open to
international companies competing for limited access to the Middle East's
oil and gas fields.
"We expect to sign within a week," Omair Suwaina, manager of the
onshore division of Adnoc's exploration and production directorate, told
reporters on the sidelines of an energy conference. "The project is
going as planned, there are no delays or issues."
Suwaina declined to confirm the winner of the contract nor the estimated cost
of the project.
Rising costs worldwide in the energy industry had pushed up the investment
needed in sour gas development, he said in a presentation to the conference.
Last year, analysts pegged the price of developing both Shah and a second sour
gas field called Bab at $10 billion. Now, the cost is as high just for the
one field.
He said the UAE would go ahead with plans to develop other sour gas fields.
"There will be more developments. It is necessary and we have to do it,"
he said.
Still, the rising price of sulphur, a by-product of cleaning up the gas, would
help make the projects profitable, he added.
Sulphur prices stood at around $700-$800 a tonne, Suwaina said.
29 April 2008 07:33 GMT
| last updated:
29 April 2008 07:59 GMT
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