Russian firm wins $418m Dolphin pipeline contract

A leading Russian construction company has won a major UAE gas pipeline deal after beating four key rivals from the Emirates, Italy and India. Stroytransgaz, one of world's largest 100 construction firms, was awarded the $418 million (Dh1.53 billion) contract by Dolphin Energy for the construction of a 240km pipeline from Taweelah, north of the capital, to Fujairah on the eastern UAE coast just outside the strategic Straits of Hormuz.

The project, which involves one of the longest pipelines in the Gulf, will provide Qatari natural gas to the Qidfa power and water desalination plant, owned by Abu Dhabi Water and Electricity Authority (Adwea).

"Dolphin Energy Limited announces the award of the construction contract for its new Taweelah to Fujairah Gas Pipeline (TFP) across the UAE to Stroytransgaz of Russia. Site work will begin during third quarter 2008," Dolphin said yesterday.

"The new gas pipeline will be 48 inches in diameter. It is to be laid over an environmentally approved cross-country route, through more than 240km of desert and mountainside – one of the longest and largest overland pipelines in the UAE."

The statement said the pipeline would link Dolphin Energy's gas receiving facilities at Taweelah with Qidfa, in Fujairah. It is designed to carry significant quantities of Dolphin gas from Qatar via Taweelah directly to the UAE east coast.

"The value of the pipeline construction contract is $418m. Eight international construction companies initially bid for the work, and technical tenders were accepted from five, which proceeded to the commercial bid stage," it said.

The companies shortlisted were the UAE's Al Jaber Energy Services, the Athens-based Consolidated Contractors International (CCC), Dodsal of India; Stroytransgaz of Russia and Saipem/Snamprogetti of Italy. The award for the line pipe was announced in December. The order went to Salzgitter Mannesmann International GmbH, and is worth more than $200m.

Some 120,000 tonnes of 48in coated pipe will be supplied for the project, part of Dolphin's long-term plan to transport gas to all clients. Already more than 40 per cent of the pipe lengths have been received, with delivery completion set for mid 2009.

"We congratulate Stroytransgaz on being awarded this contract, at the end of an exhaustive tender process". Dolphin General Manager UAE, Ibrahim Al Ansari, said: "Dolphin expects swift mobilisation and efficient progress with the contract. We are fully committed to supporting Adwea gas requirements." Dolphin was created more than seven years ago as a joint UAE-Qatar foreign venture to transport natural gas from Qatar's mammoth North Field to the UAE and Oman through a 360km subsea pipeline, one of the longest underwater gaslines in the world. Gas began flowing into Taweela's processing facilities last year at a rate of 1.6 billion cubic feet and supplies are expected to surge to two bcfd this year. They include 788 million cubic feet per day contract for Abu Dhabi Water and Electricity Authority, 730 mmsf/d for Dubai Supply Authority, 141 mmsf/d for the Union Water and Electricity Company and 200 mmsf/d for Oman Oil Company. Dolphin Energy, which invested nearly $5bn in the project, is owned 51 per cent by Mubadala Development Company, on behalf of the Government of Abu Dhabi – and 24.5 per cent each by Total of France and Occidental Petroleum of the US. The Fujeirah gasline deal is Stroytransgaz's second major construction contract in the Gulf. In 2007, the company was awarded a contract by the state Saudi Aramco for the expansion of the Sheiba-Abquiq oil pipeline in Saudi Arabia.

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