Abu Dhabi's challenging Shah sour gas project is essential to the emirate's plan to become the world's second-biggest chemicals producer after Saudi Arabia, an executive of a chemicals company says.
In particular, the Borouge 3 chemicals expansion, which is expected to boost the emirate's annual production capacity for polyolefins to 4.5 million tonnes by 2013 from a forecast 2 million tonnes at the end of this year, needs natural gas liquids from the Shah deposit as feedstock.
"This will be the gas for Borouge 3," Matthias Stein, the Middle East general manager for the German chemicals contractor Linde, said at the MEED Abu Dhabi conference.
Polyolefins are used in a diverse range of products includingplastic (polyethelene, or polythene) bags and insulating fabrics such as polypropylene.
He said he understood the US$10 billion (Dh36.72bn) Shah development would continue even though ConocoPhillips, the US oil group that had formed a joint venture with Abu Dhabi National Oil Company (ADNOC) to develop the deep gas deposit, quit the project last year.
ADNOC has awarded contracts for all the project's main engineering and construction packages except the development of facilities to transport and process sulphur, a by-product of Shah gas production.
The gas is rich in toxic hydrogen sulphide, which would be converted to sulphur under the development plan. Sulphur is used to make fertilisers, sulphuric acid and rubber.
Similarly, Borouge, a joint venture between Abu Dhabi's state-owned International Petroleum Investment Company (IPIC) and the Austrian chemicals company Borealis, has awarded $2.6bn of contracts for Borouge 3, an expansion of its facilities at Ruwais in western Abu Dhabi.
Linde is building a vital piece of chemicals processing equipment for the enterprise called a cracker. It will be the third such unit the company supplies to Borouge and among the largest of its kind in the world when completed in 2013.
Linde is also in a joint venture with ADNOC to produce nitrogen gas for use in oil recovery.
Mr Stein said the Elixier joint venture would start operating two "very large" nitrogen plants to lift the recovery of condensate from Habshan, Abu Dhabi's largest onshore oil and gasfield.