OMAN - Exporting Gas To UAE; Imports From Qatar Start From '08.

Oman in early 2004 began exporting natural gas to the UAE through a short pipeline built by Dodsal of India. The pipeline runs from the new Omani industrial zone in Sohar to the UAE border near al-Ain. The volume of gas being exported averages 135 MCF/d.

The buyer is Abu Dhabi-based Dolphin Energy Ltd (DEL), a JV controlled 51% by the Abu Dhabi-owned Mobadala Development, with each of Total and Occidential Petroleum of the US holding 24.5%.

In January 2004 DEL signed an operations and maintenance (O&M) agreement with the Emirates General Petroleum Corp. (Emarat) to run the 24-inch, 182-km gas pipeline from al-Ain to Fujairah, on the east coast of the UAE. The agreement ran for two years. In early 2006, DEL took over the O&M of this Line. This supplies Omani gas to al-Ain and the Abu Dhabi-controlled Union Water and Electricity Co. (UWEC) power and desalination plant in Fujairah.

DEL announced on Sept. 5, 2005, that it had signed a 25-year SPA with the state-owned Oman Oil Co. (OOC) to deliver 200 MCF/d of Qatari gas to the sultanate starting in early 2008. This came 16 months after the two companies signed a memorandum of understanding (MoU). By then DEL will have developed natural gas in a portion of Qatar's offshore North Field, to be on stream in late 2006, and will by early 2007 have started supplying the UAE with the gas through a marine pipeline to Abu Dhabi. The link to Oman's market will be the Sohar-al-Ain pipe, which will be reversed for the deliveries to begin in early 2008.

The Sept. 5 SPA was signed in Abu Dhabi by UAE Deputy Premier Shaikh Hamdan bin Zayed al-Nahyan, the chairman of DEL, and Omani Minister of Commerce, Industry and Minerals and Chairman of OOC, Maqbool bin Ali bin Sultan.

Bin Sultan said: "This agreement with Dolphin Energy will further strengthen the existing brotherly ties and enhance the co-operation between the Governments of Oman and the UAE". Shaikh Hamdan noted that the agreement created a GCC gas grid linking three GCC states [Qatar, the UAE and Oman] and thus presenting a true example of the GCC establishing ties of co-operation". The Arab Gulf Co-operation Council (GCC) groups six states, the other three being Bahrain, Kuwait and Saudi Arabia.