The company is in talks to carry granulated sulphur, a by-product of processing sulphur-rich oil and natural gas.
Union Railway extends its reach
Union Railway is enlarging the scope of its UAE heavy railway network so it can transport sulphur from Al Gharbia for the Abu Dhabi National Oil Company (ADNOC), its chairman said yesterday. The company is in talks to carry granulated sulphur, a by-product of processing sulphur-rich oil and natural gas, from ADNOC's undeveloped Shah field in the western region to the Ruwais petrochemicals complex and port, said Hussain al Nowais, the chairman of Union Railway.
The sulphur could then be exported by ship for use in fertiliser and sulphuric acid, most likely in India and China. "We are in advanced discussions for the movement of 7 million tonnes of granulated sulphur coming out of Shah," Mr al Nowais told the "Middle East Rail Projects 2009" conference hosted by MEED. "It will be the first time such massive quantities of sulphur will be transported for such a long distance."
An additional spur will run 200km from the Shah field to Ruwais, bringing the total length of the network to 1,300km. The state-owned railway company plans a freight and passenger network running from the Saudi border in Abu Dhabi to terminals in Ras al Khaimah and Fujairah, with branch lines to industrial and transit points such as airports. One important link will extend to Al Ain and ultimately connect with the Sohar industrial port, on the Omani coast.
The first phase of the network, including the spur from the Shah to Ruwais, is expected to open around 2014. The entire network is expected to cost Dh30 billion (US$8.16bn), with the first construction contracts to be awarded next year, the company said. Union Rail officials hope the network will improve the country's transport infrastructure while boosting the competitiveness of its emerging petrochemicals and metals industry by connecting the country's oil and gas facilities with downstream industries and ports.
Union Railway estimated that 3 million containers will need transport across the UAE by 2015, as well as 30 million tonnes of items such as crushed stone, aluminium, cement, iron ore and steel. The plan to transport sulphur by rail will allow ADNOC and the US energy firm ConocoPhillips to move ahead with their $10bn Shah project to produce sulphur-laced gas from a deeply buried Abu Dhabi gasfield. The partners' original plan to build the world's longest pipeline for liquid sulphur had proved to be a bigger than expected technical challenge that had threatened to delay the development. The Shah gas is urgently needed by Abu Dhabi power stations and industrial plants.
The efforts to find a way to dispose of the sulphur come as prices for the commodity have plummeted with the global recession to as low as $30 a tonne earlier this year from more than $850 a tonne at the peak. Shah gas contains a particularly high concentration of hydrogen sulphide, which is toxic and must be removed from any gas destined for sale. The development plan calls for the sulphurous gas to be converted into elemental sulphur, a yellow solid that is mainly used to make fertilisers and sulphuric acid.
Abu Dhabi also extracts hydrogen sulphide from its existing oil and gas developments, especially at Habshan, the site of about half of ADNOC's onshore oil production. Developing economies of scale for sulphur processing and transportation is one of the ways that ADNOC had hoped to make expensive new gas developments such as Shah economically viable. When Shah is up and running, Abu Dhabi will become one of the world's biggest sulphur producers with output comparable to that of Canada, the leading exporter.
Last year, Canada exported 7.4 million tonnes of sulphur. Most of that was transported by rail from oil and gasfields to markets in the US, and to Canadian ports. @Email:firstname.lastname@example.org email@example.com