The UAE and Qatar have pumped nearly $5 billion (Dh18.3bn) into the Dolphin project, which involves the first major trans-Gulf gas pipeline and one of the world's largest natural gas treatment facilities, officials said yesterday.
The project, to be officially launched by Qatar's Emir Sheikh Hamad bin Khalifa Al Thani today, will pump nearly two billion cubic feet per day (bcfd) of natural gas to Abu Dhabi and nearby Oman, but supplies could be increased later, said Dolphin Energy Director-General Adel Al Buainain.
"This project costs around $5bn and involves one of the world's largest gas processing facilities in Ras Laffan as this unit alone cost nearly $1.6bn," he was quoted as saying by the Qatari Arabic language daily Alsharq.
More than 500 officials and company executives from the UAE, Qatar and other countries will attend today's inauguration at Ras Laffan north of the Qatari capital Doha, one of the largest gas industrial cities in the world.
Ras Laffan serves Qatar's giant offshore North Field, which contains the world's largest non-associated gas reserves of more than 900 trillion cubic feet.
Besides the Dolphin facilities, Ras Laffan is the hub of Qatar's fast-growing LNG industry, with current production exceeding 30 million tonnes per year, to be more than doubled to 77 million tonnes by 2012. In its first stage, Dolphin will supply two bcfd to the UAE and Oman but supplies could reach 3.2bcfd to cater for possible growth in demand.
According to Buainain, increasing supplies requires fresh agreement with Qatar.
"The Dolphin pipeline can transport 3.2bcfd… as you know, the present contract with Qatar involves the supply of two bcfd an equivalent of 333,000 bpd of oil."
"Dolphin could later have new clients for the extra supplies and this will, of course, require a new agreement with the Qatari Government," he said.
Dolphin project, a joint UAE-Qatar-Western venture, started nearly eight years ago, involved the construction of a 364km sub-sea pipeline that traversed the Gulf sea across the shores of Qatar, Saudi and the UAE.
Gas began flowing into Taweelah just outside Abu Dhabi city last year at a rate of 1.6bcfd and supplies are expected to surge to two bcfd this year.
They include 788 million cubic feet per day for the 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.
The UAE has the fifth largest gas deposits but most of them are sour gas and associated with oil, thereby, making their separation a costly process.
The UAE has one of the fastest-growing gas demand in the Middle East due to a rapid expansion in power and industrial projects and its gradual switch to gas as a cleaner source of energy. From around 21.2 billion cubic metres in 2000, the UAE's gas demand surged to 34.1 billion cubic metres in 2005 and is projected to soar to 42.9 billion cubic metres in 2010, to 51.9 billion cubic metres in 2015 and nearly 63.2 billion cubic metres in 2020, according to the Ministry of Energy.
Dolphin Energy is owned 51 per cent by Mubadala Development Company, on behalf of the Government of Abu Dhabi – and 24.5 percent each by Total of France and Occidental Petroleum of the United States.
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