Dubai: ConocoPhillips and Abu Dhabi are expected to opt for a rail line to transport sulphur from their planned $12 billion (Dh44.07 billion) Shah sour gas field development in the emirate, although a formal decision hasn't been made, people familiar with the plans say.
A joint venture of Conoco-Phillips and Abu Dhabi National Oil Company, or Adnoc, had originally planned to build the world's longest sulphur pipeline as part of the project that is vital for energy supply in the United Arab Emirates. But the companies are now leaning towards choosing a rail line that was first proposed last year, the people say.
"The train option is the favourite but it has not been concluded and they are just weighing the pros and cons of each option," a Dubai-based industry official familiar with the situation told Zawya Dow Jones.
The companies decided to study the rail option as an alternative to their original plan to use a pipeline to transport sulphur from the Shah field over a distance of about 264 kilometres via Habshan to Ruwais on the Arabian Gulf coast where the toxic product was to be granulated. The rail plans emerged after the joint-venture partners failed to attract feasible engineering bids for the liquid sulphur pipeline due to its technical challenges.
An official at a construction company bidding for work on Shah said indications are mounting that a decision in favour of the railway has been made.
"They are asking some companies to remove camps, which are obstructing the railway route," the industry official said. "They would not do that unless they have made up their mind to go with the railway option."
If the rail plans go ahead, they will be implemented by the UAE's Union Railway Company, which is tasked with developing a 1,100-kilometre railway network across the country. In October last year the chairman of state-owned Union Railway, Hussain Al Nowais, said the company was in talks with the ConocoPhillips-Adnoc venture to build the Shah-Ruwais link as part of the countrywide rail system.
Union Railway said on March 24 it held an industry workshop that was attended by 360 local and international companies in Abu Dhabi, presenting its plans for the Shah-Ruwais link as phase one of its national rail network plans.
Under the company's schedule, it plans to prequalify companies interested in the Shah-Habshan rail line this year, followed by the release of request for proposal, or RFP, documents in mid-2011 and a contract award in 2012. Trial runs are scheduled for the beginning of 2015.