Dubai, Pakistan join U.A.E. gas megaproject

The U.A.E.-based U.A.E. Offsets Group (UOG) has garnered more support for its Dolphin natural gas initiative in recent weeks.

The Dolphin program is designed to connect Qatar's copious gas supplies with growing demand in the Persian Gulf region and beyond. Early this month, UOG announced that Oman agreed to join the Persian Gulf-region natural gas-based industrial initiative (OGJ, June 7, 1999, Newsletter). Since then, Dubai and Pakistan have added their names to the list of participants.

The Dolphin initiative is being promoted by the government-sponsored UOG. It is envisioned to go beyond supply arrangements, eventually encompassing a broad range of gas-based industrial projects, including petrochemicals and power generation plants.

It will be based on further development of Qatar's supergiant North field and is aimed at developing "an extensive gas supply and infrastructure system encompassing countries both within the region and outside it," said UOG. "It will be the largest scheme of its kind ever undertaken, requiring investment estimated at $8-10 billion."

New agreements

Pakistan has signed a memorandum of understanding (MOU) with UOG for "the promotion of economic cooperation through investment in the energy sector of Pakistan," according to UOG. The MOU also paves the way for UOG to submit a firm proposal to supply and transmit 1.0-1.5 bcfd of gas to Pakistan.

Following the Pakistan agreement, Dubai joined Dolphin by signing an MOU under which it will purchase 200-700 MMcfd of gas, beginning "as soon as possible," according to UOG. In addition, Dubai and UOG will cooperate in "identifying and maximizing opportunities for investment arising out of the provision of gas."

A detailed gas sales agreement between the two governments is expected by yearend.

The Dubai agreement "completes the chain," said UOG.

Sheikh Ahmed bin Saeed Al Maktoum, director general of Dubai Supply Authority, said the Dolphin gas would bridge the energy supply-demand gap that Dubai believes will develop over the next 5 years as its economy expands.

Despite the signing of several MOUs in recent weeks, the Dolphin project still has an air of tentativeness, with each supply agreement entailing a relatively wide range of gas quantities. In addition, the project has, to date, involved only government-related entities.

UOG Deputy Chairman Mohamed Saif Al Mazrouei said, "We expect this agreement with Dubai to stimulate even further interest from the local, regional, and international private sector in becoming investment partners in the program. We are in very detailed talks with the major companies in the energy sector, and we expect to be announcing our first commercial partners shortly."