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 major contract for the development of sour natural gas reserves within the next week. This announcement comes as the country continues to expand its energy infrastructure and secure long-term energy stability. Earlier this year, in February, Adnoc's news provider told Reuters that ConocoPhillips, a leading U.S. oil company, had won the contract to develop sour gas in the Shah gas field. The project is expected to cost over $10 billion, though neither ConocoPhillips nor Adnoc has officially confirmed the deal. Despite the lack of formal announcements, sources close to the project suggest that negotiations are progressing smoothly and no major obstacles have been encountered. This initiative marks the UAE’s largest upstream project in recent months, with limited competition from international oil and gas firms in the region. Umell Suwina, manager of land operations at Adnoc Exploration and Production, confirmed during an energy conference that the contract with ConocoPhillips is expected to be signed soon. He emphasized that the process has been on track with no delays or complications. Suwina declined to confirm the exact winner of the contract or provide detailed cost estimates, but he noted that rising global energy costs have significantly increased the investment required for such projects. Industry analysts previously estimated the total cost for developing both the Shah and Bab sour gas fields at around $10 billion. However, current figures suggest that the cost for one of these fields alone now exceeds $10 billion. As a key fuel for the UAE’s rapid economic growth, the country faces a natural gas shortage and is committed to advancing plans for other sour gas fields. Additionally, sulfur—a by-product of sour gas extraction—could play a crucial role in making the project profitable. With sulfur prices currently ranging between $700 and $800 per ton, the by-product adds value to the overall operation. The UAE holds the world’s fifth-largest natural gas reserves, totaling 214 trillion cubic feet, most of which are sour gas. Unlike conventional natural gas, sour gas contains hydrogen sulfide, a toxic substance that makes extraction more complex and costly. Despite these challenges, the UAE remains determined to harness its vast sour gas resources to meet growing domestic demand and support its energy strategy.

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