Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, on Tuesday officially inaugurated the US$10 billion Al Hosn sour gas project in Al Gharbia and was briefed on the possible expansion of the strategically important energy sector development.
Sheikh Mohammed, accompanied by Sheikh Hamdan bin Zayed and Sheikh Mansour bin Zayed, together with Sultan Al Jaber, chief executive of Adnoc and Vicki Hollub, incoming chief executive of Occidental Petroleum, cut the ribbon on the project, which began ramping up production last year.
Al Hosn, which is 60 per cent owned by Adnoc and 40 per cent by Occidental, is the world’s largest ultra-sour gas development project, extracting 1 billion cubic feet per day of ultra-sour gas from the Shah gasfield. About half of this volume ends up being fed into the UAE’s gas transmission network to meet the country’s growing gas demand and reduce the need for imports. Demand for natural gas in the UAE has been rising rapidly – about 6 per cent a year – and the country has had to import an increasing amount since 2008.
“Occidental is looking forward to the possibility of expanding the Al Hosn gas project to help the UAE meet its energy needs," Ms Hollub said. The project provides 10 per cent of the country’s natural gas, contributing to producing energy that supplies more than 200,000 houses with water and electricity, according to Al Hosn.
The Shah gasfields, which are in the desert about 210 kilometres south-west of Abu Dhabi city, have very high levels of hydrogen sulphide, averaging 23 per cent, as well as high levels of carbon dioxide.
The project is being closely watched by the industry worldwide for the manner in which it deals with the technological and economic challenges, which includes recovery of sulphur on an unprecedented scale.
After processing, about 10,000 tonnes per day of “pure granular sulphur" is harvested and transported by rail to the facility at Ruwais for export for production of fertilizer and sulphuric acid. The project produced about 2 million tonnes of sulphur last year and is forecast to produce 3.2 million tonnes this year.
Speaking during his tour of the project, Sheikh Mohammed praised Adnoc’s role in positioning the UAE on the global energy map as a reliable and secure source of natural gas. He expressed his support for Adnoc’s plans to ensure a sustainable supply of gas and its commitment to developing the needed infrastructure and skills.
“The inauguration of the Al Hosn Shah sour gas development project is an important milestone for Adnoc as we maximise the value of Abu Dhabi’s gas resources to meet the United Arab Emirates and the world’s growing demand," Mr Al Jaber said. “It is a prime example of how Adnoc utilises innovative solutions to deliver on our strategic objectives and maintain our competitive edge."
While Ms Hollub did not elaborate on what the expansion of Al Hosn might entail, the project already is expected to be lucrative for her company. Stephen Chazen, the outgoing Occidental chief executive, said he expects the company’s 40 per cent stake to generate between $300m and $600m of “free cash flow" a year.
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