Dolphin in talks to acquire Qatar gas

The Abu Dhabi company Dolphin Energy is in talks with Qatar Petroleum to boost its gas imports from Qatar. Dolphin, controlled by the government-owned Mubadala Development, said it could receive an additional 300 million to 500 million cubic feet a day (cfd) of gas on an "interruptible basis", meaning it would not have a firm contract from Qatar Petroleum for the gas supplies, and would get the gas only when other international customers did not want their full allotted volumes. Some of the gas would be available only on a seasonal basis, it added. But that season is likely to be summer, when gas demand peaks in the Gulf but falls in the Asia Pacific and European countries that buy most of Qatar's gas. Dolphin, whose other partners are Total, the French energy group, and Occidental Petroleum, the US oil and chemicals company, has a contract to receive 2 billion cfd of gas through an undersea pipeline to Abu Dhabi from Qatar. It resells the gas to customers throughout the Emirates and in Oman. But the pipeline has a capacity to transport 3.2 billion cfd, and Dolphin has long sought to fill the excess. That aspiration has been hampered by a moratorium that Qatar's government placed on further projects to increase output from its huge offshore North Field, from which it also sources gas for the world's biggest array of gas liquefaction plants. Qatar is the leading exporter of liquefied natural gas (LNG), supercooled gas that can be loaded on to tankers for shipment overseas. The moratorium, imposed so that Qatar could carry out a reservoir study of the North Field, is unlikely to be lifted before the end of 2013, Abdullah al Attiyah, the emirate's deputy prime minister, has said. Qatar is in the process of more than doubling its LNG export capacity to 77 million tonnes annually by the end of next year from about 31 million tonnes last year, and all the additional gas scheduled to be pumped from the North Field has been earmarked for the expansion. However, the economic downturn has led to a worldwide slump in gas demand, coinciding with a global surge in production capacity, as existing exporters from Australia to Algeria expand their facilities and other gas producers, such as Yemen, complete their first LNG projects. That provides Qatar with the opportunity to divert gas from customers who no longer need all their contracted volumes to others willing to pay international prices for extra supplies. However, those prices are likely to be significantly higher than the estimated US$1.30 (Dh4.77) per thousand cubic feet that Dolphin is understood to be paying for its current supplies. tcarlisle@thenational.ae