Budget on ADNOC gas JV could rise to $12bn
Sulfur gas pipeline causing major headaches on Shah gas development
The budget for the Shah sour gas field, the joint venture between Abu Dhabi National Oil Co (ADNOC) and ConocoPhillips, may see its budget rise by US$2 billion due to the construction of a sulfur gas pipeline.
Sources close to the project have told news agency Zawya Dow Jones that the complex nature of the what will be the world’s largest sulfur pipeline will mean that the project cost could rise by 20% to $12 billion.
"The Shah project is moving ahead but at a cost of $12 billion instead of $10 billion because of difficulty in finding people to do the sulfur pipeline," the source is quoted by Zawya Dow Jones as saying.
ADNOC announced four tenders for the Shah field at the Gastech 2009 conference held in Abu Dhabi in May. However, the package covering the construction of the 275 km pipeline that will transfer the sulfur to Ruwais where it will be granulated was not released due to a lack of suitable bidders.
The technical issues surrounding the contract involve keeping the sulfur in a liquid form. This means that the pipeline will need to keep a constant temperature of between 125-155 degrees Celsius.
The reserves held in the Shah gas field have been cited by Abu Dhabi as an essential requirement to the UAE’s energy requirements.
The Shah Gas Development project is targeting natural gas condensate reservoirs in the onshore Shah Gas Field, found 180km southwest of Abu Dhabi. T
The joint venture will involve the construction of a one billion ft3/day gas processing plant, new gas and liquid pipelines and the aforementioned sulfur exporting facility.