Published: 11 February 2010 22:36 GMT | Last updated: 11 February 2010 23:21 GMT
Nassir Shirkhani, Beirut for Upstream
Shah project and integrated scheme are key planks of Persian Gulf emirate’s energy strategy amid constraints in crude sector
Abu Dhabi’s relatively modest conventional non-associated natural gas reserves have prompted the Persian Gulf emirate to embark on costly development projects worth more than $20 billion in a bid to boost supplies to meet galloping demand from the United Arab Emirates.
The UAE has estimated natural gas reserves of 212 trillion cubic feet — the fifth largest in the world — but the bulk of it is either sour or associated with oil production.
The country’s strict policy of zero flaring and a determination to rely on its own resources are the driving forces behind the costly schemes now under way.
The two major gas developments centre on making use of associated gas from offshore and onshore fields and tapping into costly sour gas reserves, development of which is proving challenging because of high contents of toxic materials that need to be handled safely.
The deals underpin efforts by state-owned Abu Dhabi National Oil Company (Adnoc) to guarantee enough supplies to meet robust demand from power plants, heavy industries and the company’s own needs for re-injection.
They will deliver 1.5 billion cubic feet per day once completed in the next five years but Adnco may still struggle to satisfy demand.
Abu Dhabi, the capital of the UAE, owns more than 90% of the country’s oil and gas reserves, and the government sees securing new gas supplies as crucial to the success of its economic development in the next two decades.
Ismail al Ramahi, manager of Adnoc’s gas processing division, is upbeat despite the challenges in monetising sour gas. The UAE is pursuing a number of major strategies and is making progress on all fronts, he says.
"We went back to the drawing board to develop ideas to get more gas to [the UAE] and Abu Dhabi," Ramahi told the Gas Arabia Summit last week. "The innovative projects will put Abu Dhabi on the map in the field of gas."
A major initiative involves integrating gas production from the onshore and offshore fields with the aim of bringing 1 Bcfd of offshore gas ashore.
The first stage of the Integrated Gas Development Project — being undertaken by Adnoc’s subsidiary, Abu Dhabi Gas Industries Company (Gasco) — is nearing completion with the second stage scheduled to start up in 2013, Ramahi says.
The bulk of the associated gas will come from the offshore Umm Shaif field.
Gasco has formally selected contractors for four of the five main engineering, procurement and construction packages to build onshore facilities at Habshan and Ruwais for the $11 billion integrated gas project.
A consortium of JGC of Japan and Maire Tecnimont of Italy won the $4.7 billion Habshan gas processing contract while South Korea’s Hyundai Engineering & Construction picked up the $1.7 billion Habshan utilities contract. Another Korean player, GS Engineering, and UK-listed Petrofac won the $2.1 billion Ruwais liquids extraction deal while US company CB&I bagged the Ruwais storage contract.
At the same time, Adnoc and US supermajor ConocoPhillips have agreed to develop the sour gas reserves of the onshore Shah field at a cost of more than $10 billion.
Ramahi is confident the Shah project will go ahead and serve as "a landmark for sour gas projects around the world".
Tendering for the main construction and engineering packages on the sour gas project is under way with first gas from Shah scheduled to flow in late 2013 or early 2014, he says.
However, ConocoPhillips, which has a 40% stake in the sour gas project, has yet to sanction the scheme, highlighting the fact that it is still not that far along the development path.
The Adnoc-ConocoPhillips joint venture has yet to award the main EPC packages tendered last May.
They cover upstream gas gathering facilities, the gas processing plant, the sulphur recovery units and the utilities.
One major challenge is how to transport high volumes of dangerous sulphur from the project.
Adnoc and ConocoPhillips are considering two different ways of transferring millions of tonnes per annum of sulphur between production and processing facilities at the Shah gas field and processing and distribution units at Habshan and Ruwais.
A complex pipeline option would carry the sulphur in liquid form while a railway would transfer the chemical in a granulated pellet form. The partners had originally planned to use a 275-kilometre pipeline to transfer the sulphur but a lack of interest from contractors in the potentially dangerous scheme brought the rail option to the fore.
The rail option may force a change in the scope of the project as facilities have to be built at Shah to prepare the sulphur for rail transportation.
Ramahi says there are "many technological obstacles" in handling the sulphur content.
ConocoPhillips is counting on the sale of about 10,000 tonnes per day of sulphur stripped out from the gas to help boost the economics of the Shah project, which will extract 1 Bcfd of gas to produce 570 million cubic feet per day of sales gas. The joint venture will also benefit from the sale of 50,000 barrels per day of high-value condensate.
Shah remains key to developing other sour gas projects at Bab and Hail to help Abu Dhabi ensure enough domestic supplies.
Abu Dhabi produces 6 Bcfd of gas but exports about 1 Bcfd in the form of liquefied natural gas. That leaves about 5 Bcfd for domestic consumption and re-injection.
The UAE is a net importer, receiving 2 Bcfd of Qatari gas via an undersea pipeline built by Dolphin Energy.
No comments:
Post a Comment