Bab, the sour gasfield being developed by Royal Dutch Shell, could open up opportunities for Abu Dhabi in downstream industries such as asphalt and cement production, said a top executive for the Anglo-Dutch multinational.
Although the main target of the development is to provide gas to fuel Abu Dhabi’s growing demand, hydrogen sulphide accounts for 30 per cent of the field, and turning that sulphur into money is key for the company. It aims to rely on its sulphur marketing network, but could also use sulphur as a fertilizer feedstock or to replace bitumen in asphalt or concrete in building materials.
“We have particular technologies there,” Andrew Brown, Shell’s international head of upstream, said in an interview in the capital. “At this point there are no firm plans to use any of those technologies here, but we have that suite of technologies that can create outlets for sulphur in case the sulphur market is weak.”
Abu Dhabi has turned to developing so-called “sour” gas assets, named for their high content of corrosive and potential deadly sulphur, as it seeks to meet power demand that is growing at 10 per cent a year.
To back the sour-gas developments, Abu Dhabi is investing in building the UAE’s first railroad, which will transport sulphur pellets from the Shah gasfield to the coast, from where the sulphur can be exported.
Mr Brown did not say if additional export infrastructure would be needed to account for added volumes from Bab, which became the second gasfield to come under development when Shell won the rights in May in a surprise decision over France’s Total.
Shell has bid three times for sour-gas projects in Abu Dhabi, losing out previously on the Shah sour gasfield to ConocoPhillips and later Occidental, both of the United States. Shell is in the process of establishing the 60-40 joint venture with Abu Dhabi National Oil Company (Adnoc) and has yet to issue a tender for front-end engineering, said Mr Brown.
Last month Shell submitted a bid to renew its stake in Abu Dhabi’s oldest onshore concession, whose rights have been held by Shell, Total, BP, ExxonMobil and Portugal’s Partex for the greater part of the century.
The tender calls for bidders to operate the field starting in January 2015, leaving a one-year gap between the expiry of the current concession and the start of the new one. Abu Dhabi Company for Onshore Oil Operations (Adco), as the operating consortium is called, said it can operate independently in the interim.
“If we can provide specific expertise, if we can assist in project development, assist in marketing activities, assist in technology, then I think Adnoc will be keen to be partners with us,” Mr Brown said. “But in some cases Adnoc clearly has enormous capabilities themselves, and they want to do projects themselves.
“I’m delighted that we continue to be invited in to bid for Bab, to bid for the Adco extension, and I think it demonstrates how deep the partnership is.”