United Arab Emirates and Confi into signing sulfur-containing gas development contract
Abu Dhabi, April 30 — According to overseas media reports, an official from the United Arab Emirates' National Oil Company (Adnoc) revealed on April 29 that the UAE is set to finalize a contract for the development of sour natural gas reserves within the next week. This major project marks a significant step in the country's energy strategy, aiming to boost domestic natural gas production and reduce reliance on imports.
In February, Adnoc's news provider told Reuters that ConocoPhillips, a U.S. oil giant, had secured a key project to develop sour natural gas in the Shah gas field. The estimated development cost for this initiative exceeds $10 billion, though neither ConocoPhillips nor Adnoc has officially confirmed the deal yet.
This project is considered the largest upstream venture in the UAE over the past year, with limited competition restricted to major international players in the Middle East's oil and gas sector. Umell Suwina, manager of land operations at Adnoc Exploration and Production, mentioned during an energy conference that the contract with ConocoPhillips is expected to be signed within the coming week. He emphasized that the process is progressing smoothly without any delays or complications.
Suwina declined to confirm the winning company or disclose the exact project cost, but he highlighted that rising global energy costs have significantly increased the investment required for sour gas development. Industry analysts previously estimated the total cost of developing the Shah field and another sour gas field called Bab at around $10 billion. Today, the cost for just one sulfur-bearing gas field has already reached $10 billion.
As a vital fuel for the UAE's rapid economic growth, the country faces a natural gas shortage and plans to continue developing other sour gas fields. Additionally, sulfur — a by-product of sour gas extraction — is expected to play a key role in making the project profitable, as sulfur prices have risen sharply. Currently, sulfur is trading at approximately $700 to $800 per ton.
With the world’s fifth-largest natural gas reserves — totaling 214 trillion cubic feet — the UAE holds vast amounts of sour gas, which contains hydrogen sulfide, making it more challenging and expensive to extract compared to conventional natural gas. Despite these challenges, the UAE remains committed to unlocking this valuable resource to meet its growing energy demands.
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