Emirates Business 24|7 reported that Abu Dhabi has signed a long awaited agreement with ConocoPhilips for the development of the remote border Shah sour gas field, which involves the world's largest sulphur pipeline.

Government controlled Abu Dhabi National Oil Company signed the deal, which will create a JV to be owned 60% by ADNOC and 40% by the US energy giant. It is believed the project will cost in excess of USD 10 billion given the topography of the field and the high sulphur concentrations in the gas deposits. But industry sources said that the costs were in the range of USD 13 billion to USD 14 billion in 2008 when construction materials and contracting expenses were at their peak.

ADNOC said in a statement after signing the contract that "This large scale project involves the development of sour gas reservoirs within the Shah field, located onshore approximately 180 kilometers south west of the city of Abu Dhabi."

The company said that "The project will involve several gas gathering systems, construction of processing trains to process one billion cubic feet gas per day at Shah to produce 540 million cubic feet per day of network gas, in addition to new gas and liquid pipelines and the construction of sulphur exporting facilities at Ruwais Industrial City in the emirate." It said that great attention had been given during the Front End Engineering and Design stages to select state of the art HSE systems and as a result of extensive risk assessment and recovery studies.

According to ADNOC, one of the world's largest oil producers a new firm will be formed to manage and operate Shah facilities upon completion of the project.

The US based Fluor Corporation has completed the Feed work for the project, which will be launched this year and completed within 5 years. The company said that Feed work lasted around 18 months and that engineering, procurement and construction packages would be awarded in the near future.

A Fluor official said that "The project is massive as it will meet a large part of the country's gas needs but its costs are expected to be high because all the gas is sour. It will involve the world's longest liquid sulphur gas line as it will be around 300 kilometers."

The pipeline has the capacity to transport 1 billion cubic feet of produced gas through the desert to Ruwais processing facilities, south of Abu Dhabi city.

(Sourced from Emirates Business 24|7)