Qatar, U.A.E. Ink Dolphin Gas Deal
Qatar and the U.A.E. signed on March 14th a long-awaited deal worth $3.5 billion to transport Qatari natural gas to Abu Dhabi and Dubai.
Under the deal, Dolphin Energy Ltd., which is owned by the U.A.E. Offsets Group (UOG), Enron Corp. and TotalFinaElf, will develop a portion of Qatar’s huge North Field and produce up to 2 billion cubic feet per day (bcf/d) of gas.
The first gas supplies are expected to reach Abu Dhabi in late 2004 or 2005, with 1-1.5 bcf/d of gas consumed by utilities in Abu Dhabi and the remainder transported to Dubai.
Qatari Oil Minister Abdullah al-Attiyah and Ahmed Ali al-Sayegh, a UOG board member, signed a “detailed commercial term sheet agreement which sets out their mutual understanding on commercial terms of a production-sharing agreement.”
Al-Attiyah indicated that while a production-sharing agreement covering the project would not be signed until June, construction will begin immediately.
UOG will invest $2 billion in developing the North Field tract, drilling and setting up production facilities, with the remaining $1.5 billion spent on a pipeline and receiving terminals in Dubai and Abu Dhabi.
Al-Attiyah said that project was “the first export oriented pipeline project in the Middle East, which will pave the way for the creation of a GCC [Gulf Cooperation Council] gas grid, under consideration for a number of years, starting from Qatar.”
Al-Sayegh indicated that the project “offers promising prospects for industrialization in the U.A.E., where gas demand is rising by about 10 percent a year.”
© 2001 Mena Report (www.menareport.com)