Business | Oil & Gas

Adnoc and Conoco to develop sour gas field

Abu Dhabi National Oil Company (Adnoc) said on Tuesday it had signed an interim agreement with the US-based energy major ConocoPhillips for developing the sour natural gas reserves in the onshore Shah gas field.

  • By Himendra Mohan Kumar, Staff Reporter
  • Published: 00:07 July 9, 2008
  • Gulf News

Abu Dhabi: Abu Dhabi National Oil Company (Adnoc) said on Tuesday it had signed an interim agreement with the US-based energy major ConocoPhillips for developing the sour natural gas reserves in the onshore Shah gas field located about 180 kilometres south-west of the city for a cost that could exceed $10 billion.

"Under the interim agreement, Adnoc and ConocoPhillips will jointly share the cost of the Shah gas field development project. Completion of final joint venture agreements between the two parties is expected by year-end," Adnoc said in a statement.

"A new company will be formed to manage and operate Shah facilities upon completing the project, with a 60 per cent interest for Adnoc and a 40 per cent interest for ConocoPhillips," said Adnoc.

A top industry source close to the development, told Gulf News that the cost of developing the sour gas reservoirs within the Shah field will "exceed $10 billion."

Features

Sour gas is called as such because of its high sulphur content and corrosive properties. Sour gas is more costly to develop and challenging to process as it requires special handling and infrastructure.

Adnoc, which produces the bulk of the UAE's oil and gas output, last year decided to move ahead with the development of the sour gas resources as high oil prices made the project commercially viable.

Abu Dhabi has more than 200 trillion cubic feet of gas reserves, the fifth largest in the world, a large part of which are sour.

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