Dolphin Energy will use a major pipeline distribution network owned by Abu Dhabi National Oil Company (Adnoc) to supply gas to its clients in the UAE and Oman under a long-term lease agreement it signed in Abu Dhabi yesterday.
Dolphin Energy, the only trans-Gulf gasline, said it would lease Adnoc's Eastern Gas Distribution System (EGDS) for 25 years to supply its customers in Abu Dhabi, Dubai and Oman with natural gas from Qatar's North Field, the world's largest reservoir of non-associated gas.
EGDS has been used by Adnoc for many years to supply gas to its clients in Abu Dhabi and Dubai from its onshore and offshore fields. The network has more than 500km of pipeline transiting many areas, including Abu Dhabi, Dubai and Al Ain.
Under the agreement, Dolphin will use EGDS to deliver processed gas from Qatar to customers across the UAE and to Oman at a later stage. The lease deal, signed at Adnoc headquarters, replaces a temporary access agreement and interim transportation agreements with Adnoc.
The EGDS lease agreement also specifies a direct swap arrangement where Dolphin Energy will deliver gas to Adnoc's customers on behalf of Adnoc and Adnoc will provide gas to Dolphin's customer on behalf of Dolphin.
The deal was signed by Yousef Omair bin Yousef, Adnoc's Chief Executive Officer and Secretary-General of the Supreme Petroleum Council, and by Dolphin Energy Chief Executive Officer Ahmed Ali Al Sayegh.
"Adnoc, as the pioneering oil and gas producer in Abu Dhabi, is pleased to have established a long term yet flexible agreement with Dolphin Energy – one that will be of direct benefit to our customers and to consumers," Yousef said.
Al Sayegh said: "This lease agreement enables Dolphin Energy to directly manage every link in its value chain, from gas production offshore Qatar through processing, transport via subsea pipeline and overland distribution."
Dolphin officials have estimated the total cost of the project at nearly $5 billion, including the $1.6bn gas processing facilities in RasLaffan, which serves the giant offshore North Field with deposits of more than 900 trillion cubic feet.