The coming year will witness momentous change for the GCC in the global energy equation as the $ 7 billion Dolphin project, one of the world s largest ever gas developments, comes on stream.

The coming year will witness momentous change for the GCC in the global energy equation as the $7 billion Dolphin project, one of the world’s largest ever gas developments, comes on stream.

Abu Dhabi is playing a substantial role in this strategic agenda by leading the biggest ever cross-border hydrocarbon programme in the region’s history. Up to recently Gulf gas production has accounted for about10 per cent of global gas output.

Dolphin will increase this percentage share substantially as the world increasingly turns to gas to meet energy demands. The Middle East represents one of the richest sources for what is considered the clean energy of the future. In the next four years gas is expected to have overtaken coal to rank second only to oil as the most important international source of energy.

Pioneering project

Dolphin Energy, set up in 1999, is owned by Mubadala Development Company on behalf of the Government of Abu Dhabi and 24.5 per cent each by France’s Total and the US’s Occidental Petroleum.

The enterprise was established to focus on supplying natural gas to utilities and large consumers of energy in the UAE and Oman. Gas is vital for future Gulf energy needs particularly for power and desalination plants and industrial projects.

As a result, the company has moved swiftly to implement its ambitious programme of investment. Last September, Dolphin Energy signed an agreement to deliver 200 million standard cubic feet of gas a day to Oman Oil Company starting in 2009.

According to Shaikh Hamdan Bin Zayed Al Nahayan, Deputy Prime Minister and UAE Minister of State for Foreign Affairs who is chairman of Dolphin Energy:

‘With the signing of this agreement we can celebrate the creation of a true GCC gas grid – linking Qatar, the UAE and Oman.’

Initial long-term clients include Abu Dhabi Water & Electricity Authority and Fujairah’s Union Water & Electricity Company. Dolphin has also reached a 25-year agreement with Dubai Supply Authority to provide 200 million standard feet-a-day of gas to Jebel Ali starting in 2007.

New era for gas

The link to supplies of Qatar natural gas has signalled the biggest ever investment for Dolphin Energy and a new era for the GCC in utilising the region’s huge natural gas reserves.

The project is due to come on stream at the end of 2006 and involves development of Qatar’s offshore North Field gas reserves – the world’s largest single reservoir of natural gas and taking the gas 400 kilometres, via a 48 inch pipeline, for processing at a $ 1.6 billion plant under construction in Qatar’s Ras Laffan industrial city.

From Ras Laffan, where the gas processing plant will extract condensates and liquefied petroleum gas and other by-products, the refined gas will be sent through another dedicated 370-kilometre long pipeline at a rate up to 3.2 billion cubic-feet-a-day to Al Taweela in Abu Dhabi. The gas will then flow on through landlines to customers in Abu Dhabi, Dubai, the northern emirates and Oman.

The project has substantial support from global investors. In July, 2005 Dolphin Energy secured $ 4 billion of finance to cover the project’s construction costs from 25 local, Islamic and international financial institutions.

Dolphin’s CEO Ahmed Ali Al Sayegh commented:

‘The financial markets, for both Islamic financing and convential lending, have made a strong statement about the confidence they have in Dolphin Energy and the vision for regional energy integration behind it.’

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