The UAE is set to become the world's biggest exporter of sulphur by 2015, as a joint venture between Abu Dhabi National Oil Company (Adnoc) and Occidental Petroleum starts pumping gas from a landmark project located deep in the desert south of the capital.
Al Hosn Gas, the new name for the venture developing the Shah gas concession, is on track to complete the project in September 2014, its senior vice president Tareq Sahoo said yesterday on the sidelines of a conference in Abu Dhabi.
The "ultra-sour" gas from the Shah field contains 23 per cent hydrogen sulphide, a toxic gas that will be carefully separated from the sales gas in a huge processing plant before it is transformed into elemental sulphur.
When Al Hosn starts pumping gas at full capacity, about 9,200 tonnes per day of the canary-hued solid will be transported by rail from the project site, 180km south of the city of Abu Dhabi, to Ruwais on the Gulf coast. From there, it will be exported primarily to fertiliser plants in China, India and Morocco.
Abu Dhabi already produces 5,000 tonnes per day of sulphur as a by-product of oil and gas output at Habshan, the emirate's largest onshore field. The completion of Abu Dhabi's Integrated Gas Development in 2013 by two other Adnoc affiliates would more than double the UAE's total sulphur production. With the further addition of Shah sulphur, that would rise to about 22,000 tonnes per day, or more than 8 million tonnes annually, Mr Sahoo projected.
Canada, which for decades has produced sulphur from its sour-gas fields and oil sands deposits, is currently the world's top sulphur exporter. In 2009, it exported 5.8 million tonnes, representing 77 per cent of its sulphur output. Those shipments, mainly to the US, were down sharply from 8.6 million tonnes in 2006, as the global economic downturn cut global fertiliser demand.
Because of a global sulphur glut, which apart from a few months in 2008 has persisted since 1992, Canadian sulphur exports are likely to "stagnate" over the next five years, the Canadian natural resources department predicted. The government noted that Canada's main oil and gas fields are far from tidewater, with mountain ranges separating them from Pacific ports.
By contrast, Mr Sahoo is optimistic that Abu Dhabi will find markets for all its sulphur, benefiting from strong trade ties with major Asian fertiliser consumers.
In time, Al Hosn could become a major regional sulphur producer.
The company "intends to be a major player in sour gas in the region", David Schulte, a technical consultant to its debut project, told the conference. "The Shah gas development will be a model for future sour gas projects."