Mobil Oil Qatar recently agreed to begin negotiations to supply 300-500 MMcf/d of gas to the Dolphin project, which seeks to market and distribute gas from Qatar's supergiant North gas field in the Persian Gulf. Dolphin has already signed a statement of principle with Qatar General Petroleum to supply 3 Bcf/d of gas to the project, and signed memoranda of understanding to transport and resell the gas to three countries.
Dolphin is the brainchild of the UAE Offsets Group (UOG), which seeks to generate wealth for the people of the UAE and help globally integrate its economy. The project seeks to fill the large gas demand in the area resulting from economic development.
The Mobil-Dolphin agreement also allows the UOG project an option to join Mobil's production project from Qatar's North Field. A binding agreement finalizing the 300-500 MMcf/d agreement is expected by the end of the year.
"We believe Mobil and UOG together can achieve the common goal of producing Qatar North Field gas to benefit economic development of the entire region," commented Ken Hull, general manager of Mobil Oil Qatar.
Development plan
UOG's own estimate is that by 2005, Abu Dhabi's gas demand will reach 7.5 Bcf/d - double the 1996 demand. By 2005, UOG estimates Dubai demand will reach 1.5 Bcf/d - not quite double the 800 MMcf/d demand of 1996. Dolphin will attempt to fill that need.
UOG will construct a 30-48-in., 800-km pipeline from the North Field to a gas processing plant in Abu Dhabi and also an onshore pipeline to Dubai and on to Sohar, Oman. First gas deliveries from the pipeline are expected in 2002. A core element is local storage of the gas and expansion of existing gas grids to accept the North Field gas.
In the first phase, Dolphin expects to require up to 3 Bcf/d of gas, which will be used for power plants and other wealth-generating projects in the participating countries. Although no specific details of the downstream projects are available, UOG states it is in discussions with potential partners in the region and internationally. Also, potential customers include two of its own initiatives, Sina'at and Tabreed, respectively a petrochemical facility developer and a cooling systems developer. UOG also looks to invest in the downstream facilities itself.
UOG says international consultants have completed a study that determined the project was both financially viable and technically feasible. To achieve its goals, Dolphin is seeking partnerships with other international companies. Specifically, Dolphin is looking for strategic partners, operating contractor partners, local partners, and suppliers. The input from these companies will bring new investment to the UAE. The project should require an investment of $8-10 billion over the next six or seven years.
Previous agreements
The UAE became the latest government to sign on to the Dolphin gas supply and infrastructure project. Dubai signed a memorandum of understanding (MOU) in June to purchase its Qatari gas requirements from Dolphin. Under the agreement, Dubai plans to purchase between 200-700 MMcf/d, beginning as soon as possible. Previously, Oman had agreed to participate in the project. Oman's MOU outlines acceptance of 300-600 MMcf/d of gas to meet future demand.
Pakistan signed a memorandum of understanding to consider buying 1.0-1.5 Bcf/d of gas from project output, though that part of the plan may take some time, because the conceived pipeline will have to be extended across the Gulf of Oman. It is believed Pakistan may be able to begin taking Dolphin gas by 2005.
This is the beginning of a project that is sprawlingly ambitious in scope. Development and distribution of Qatari gas provides an opportunity to carry out UOG's mission. The Dolphin project will both create and feed on the industrial expansion of these countries, the UOG plans. Gas will meet the power needs of Oman and the UAE to expand existing industrial clusters. It will also feed the creation of energy-intensive industries like petrochemical plants and power generation plants.
If all goes well, the Dolphin network could be extended to south Asia. The demand for gas in India will only increase with time, and Dolphin has its eye on that market.
