Qatar Petroleum and the United Arab Emirates Offsets Group (UOG) have signed a $4 billion deal for the Dolphin natural gas project that clears the way for the development and transportation of 2 bcfd of gas from North field off Qatar to Abu Dhabi and Dubai starting as early as 2003.
The detailed agreement signed last week by Qatar Minister of Energy Abdullah Bin Hamad Al Attiyah and UAE Offsets board member Ahmed Ali Al Sayegh set commercial terms of the project's production-sharing agreement.
"The Dolphin project will bring economic benefits to both Qatar and the UAE and lead to greater integration and cooperation among the Gulf Cooperation Council states," said Al Attiyah, who, in addition to his ministerial post, is chairman of Qatar Petroleum.
"A deal of this size takes a long time to come to fruition," noted Al Sayegh.
Project details
Launched in March 1999 by the government-sponsored UOG, the project involves the development of upstream facilities to produce gas from North field's Khuff formation, transportation infrastructure linked to a gas gathering and processing plant at Ras Laffan-where condensate, ethane, sulfur, and LPG will be stripped from the wet gas-and a 350 km subsea pipeline to Taweelah in Abu Dhabi and to Jebel Ali in Dubai.
Dolphin's initial phase will require an investment of $4 billion for the 2 bcfd upstream and midstream elements, with delivery of first gas in 2003-04. That will be followed by a further multibillion-dollar investment in downstream activities over 6-7 years.
UOG formed Dolphin Energy Ltd. last year after signing up TotalFinaElf AS and Enron Corp. in March 2000 to a 25-year project development agreement to advance the upstream and pipeline sides of the envisioned GCC gas grid.
UOG owns 51% of Dolphin, while TotalFinaElf and Enron have equal shares in the other 49%.
Partner comments
Christophe de Margerie, TotalFinaElf's senior vice-president, exploration and production, said, "This is the first time in many years that a major industrial project involving several Middle Eastern countries has been implemented. We have long supported the development of such project and hope that others will follow."
UOG's Al Sayegh said Dolphin offers "promising prospects for industrialization in the UAE," when gas demand is estimated to rise at roughly 10%/year on the back of a burgeoning power sector.
"Dolphin is a demand-driven project," stressed Al Sayegh. "It complements the gas operations of Abu Dhabi National Oil Co. Our main objective is to meet the requirements of the power sector."
Sheikh Hamdan Bin Zayed Al Nahyan, UAE minister of state of foreign affairs, said Dolphin would stand as a model of how the GCC could "make use of their vast hydrocarbon resources for the benefit of one another."
