ABU DHABI - The Khalifa Group.

Now the emir heads his own ruling part of the al-Nahyan family, while his half-brother Mohammed Bin Zayed heads a rival group. The most prominent sons of Shaikh Khalifa are Sultan and Mohammed, Each heading one of the Executive Council's seven departments.

It was not until December 2003 that Sultan Bin Khalifa hoped that one day he will become the crown prince and Abu Dhabi's day-to-day ruler. That was dashed in December 2003 as Shaikh Zayed gave the post to Mohammed Bin Zayed.

Shaikh Mohammed Bin Zayed Al-Nayah: The Crown Prince of Abu Dhabi since late 2003 and head of the Executive Council since late 2004, Shaikh Mohammed is the eldest son from Shaikha Fatima - the late Shaikh Zayed's favourite wife. In late 2004 Shaikh Mohammed also became deputy commander-in-chief of the UAE armed forces, appointed to this post by Shaikh Khalifa the ruler.

The latter post put Shaikh Mohammed in charge of overseeing implementation of the UAE Supreme Defence Council's decisions related to organising, equipping and training the armed forces. The post was held by Sheikh Khalifa before he became ruler of Abu Dhabi and president of the UAE.

The Supreme Defence Council groups the country's president who is also the military commander-in-chief, the deputy president, the prime minister, the ministers of foreign affairs, defence, finance and interior, as well as the deputy commander in chief of the armed forces and the chief of staff.

Sheikh Mohammad already has been the chief of staff of the UAE armed forces. The Western-oriented Shaikh Mohammad, who has over the years forged links with the big powers, has been boosting his authority since becoming the crown prince of Abu Dhabi, following Khalifa's accession to the rulership and the UAE presidency.

Apart from his control over the military establishment and the local government, Shaikh Mohammed has been the power behind many projects. Notably these include Mubadala Development (formerly known as the UAE Offset Group - UOG), the vehicle which receives a certain percentage of all defence-related payments to foreign suppliers. Mubadala has sponsored a number of big projects, including Dolphin Energy Ltd. (DEL). DEL is an integrated upstream, midstream and downstream gas company, a joint venture between Mubadala (51%) and each of Total (24.5%) and Occidental Petroleum (24.5%).

DEL, registered in Jersey in mid-2000, will produce Qatari gas from the offshore North Field and supply it to Abu Dhabi, Dubai, Oman and Pakistan. The other main force behind this is Mohammed's full-brother Shaikh Hamdan Bin Zayed who is chairman of DEL as well as a UAE deputy prime minister and minister of state for foreign affairs. It was Shaikh Hamdan who on Sept. 26, 2004, signed with Qatar an agreement which confirmed DEL as owner and operator of a 440-km, 48-inch marine pipeline from a processing plant at Ras Laffan, the closest Qatari shore from the North Field. The pipeline will run to a landfall at the Taweelah power generating centre on the coast of Abu Dhabi. Taweelah is also the point for a pipeline supplying Abu Dhabi gas to Dubai's Jebel Ali free zone.

DEL is embarked on a $3.5 bn venture developing a part of Qatar's North Field, where natural gas will be produced, processed at Ras Laffan and pumped through the marine pipeline to the markets mentioned above. First gas is due in Abu Dhabi in late 2006 at the initial rate of 2,000 MCF/day (2 BCF/d). This will rise to 3 BCF/d, with Oman and Pakistan to be markets next to the UAE.

In the UAE demand for natural gas is rising so rapidly that the union might have to import from other neighbouring countries in the long-term to meet its power needs, said DEL chief executive Ahmad Ali Sayegh in October 2004, who told a seminar on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference: "There has been a widely-held belief that the UAE's available gas reserves would last for several years to come. But it has been proven that the country cannot fully meet demand in the long run if we look at expansion plans underway at present".Sayegh said the UAE's demand for gas will surge to 13.5 BCF/d by 2030, adding that most of the increase will come from the needs of power generation as the rapidly expanding country turns to industrialisation. One of the biggest gas importers is Dubai - expanding rapidly in all areas. Sayegh said Dubai's gas needs, growing 5%/year, will rise from 903 MCF/d in 2007 to 1.33 BCF/d 2015).

A 25-year SPA was signed in December 2001 by DEL and the state-owned Qatar Petroleum (QP), after a related upstream PSA was signed. DEL on Oct. 19, 2004, signed SPAs with ADWEA for the supply of 1 BCF/d from late 2006 and with the Abu Dhabi-financed Union Water & Electricity Co. (UWEC) of Fujairah for 150 MCF/d. Del has an initial agreement with the Dubai Supply Authority (Dusup) calling for the supply of up to 700 MCF/d to Dubai's Jebel Ali free zone. But Dubai wants to purchase more than 1 BCF/d from DEL.

The SPAs state that DEL will be the exclusive supplier of gas to the UAE utilities (see survey of Abu Dhabi in APS Review Vol. 64, Nos. 1-4).