ABU DHABI - Gas Pipeline & Dolphin Project.

Dolphin Energy (DEL), registered in Jersey in July 2000, will supply Qatari gas to Abu Dhabi, Dubai, Oman and Pakistan. The main force behind it being Shaikh Mohammed Bin Zayed Al Nahyan (see who's who in next week's Review), DEL is owned 51% by the powerful UAE Offsets Group (UOG), and 49% by an equal partnership of TotalFinaElf and Enron Corp.

DEL will develop a portion of Qatar's offshore North Field - by far the biggest gas field in the world - produce the gas and supply it to the regional market. Negotiations for a comprehensive deal between DEL and the state-owned Qatar General Petroleum Corp. (QGPC) have reached a final stage. This will consist of an upstream development and production sharing agreement and a supply contract, both for a long term.

In parallel, DEL is negotiating final sales/purchase contracts with the state-owned Abu Dhabi Water and Electricity Co. (ADWEC) and the Dubai Supply Authority (Dusup). The contracts concern the first phase of DEL's development and supply programme. For the later phases, DEL will have similar contracts with Oman and Pakistan.

In the first phase, DEL will have the capacity to produce and supply up to 3,000 MCF/day. The cost of developing a related part of the North Field and building an 800-km, 30/48-inch marine pipeline to a landfall on the coast of Abu Dhabi has been estimated at about $4 bn.

DEL is to have internal gas transmission, distribution and storage systems in these markets as well. It will also be creating further markets downstream within Abu Dhabi, Dubai, Oman and Pakistan.

UOG had signed MoUs with both Dusup and ADWEC in 1999. The one with Dusup, announced in mid-1999, calls for the supply of between 200-700 MCF/day from the North Field to Dubai's Jebel Ali free zone. The MoU with ADWEC states that Dolphin will be the exclusive supplier of gas to the utility, whose gas requirements are projected to rise from 700 MCF/day in 1999 to 1,100 MCF/day by 2005.

Demand for natural gas in Abu Dhabi has been projected to rise from 36 BCM per annum in 1996 to 73 BCM/year by 2005. Of this, 45% will go for reinjection into the oilfields. Exports, in LNG form and in gas liquids, will account for another 30%. The power sector will take 13% and the remaining 12% will go to industry.

Demand for natural gas in Dubai has been projected to rise from 8 BCM/year in 1996 to 15 BCM/year by 2005. Of this, 27% will go for reinjection into the oilfields, 33% will be taken by the power industry and 40% will go to industry. Dubai has almost 4 bn barrels of oil but has no gas. It currently gets its gas from Sharjah, supplied by BP Amoco which operates the Sajaa field and other fields in that UAE emirate.

The gas demand in Oman has been forecast to grow from 7 BCM/year in 1996 to 24 BCM/year by 2005. Of this, reinjection needs will account for 10% and 39% will go for exports (in LNG form and in gas liquids). The power sector will take 35%, and the remaining 17% will go to industry.