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Dubai: Dolphin Energy could start facilities in Qatar to process gas for export to the UAE this month, sources said.
Dolphin exports of Qatar gas to the UAE were expected to reach two billion cubic feet per day by the end of the year, boosting gas available for domestic sales in the UAE by nearly 50 per cent from last year.
The UAE sits on the world's fifth-largest gas reserves but has not developed them quickly enough to meet rising gas demand as its economy expands. Record oil revenues have fuelled the growth.
"The start is imminent," said one industry source of the gas plant in Qatar. "It will be by the end of June."
First gas from the Dolphin Qatar processing facilities should reach the UAE in July if the plants start by the end of the month, the sources said.
The start-up at the gas processing plant at the $3.5 billion project is three to four weeks late, as Dolphin previously scheduled the full commercial launch of its project in the first week of this month.
Gas demand is rising so quickly in the UAE that the Dolphin imports were only likely to meet needs for the next two or three years, the sources said.
Trouble
"We would have had trouble next summer if this gas didn't come through," said one. "As it is, they will still be looking for the next slab of gas to come through by 2010."
A shortage of supplies in the UAE led Abu Dhabi to redirect gas to power plants that it had earmarked for injection into oilfields. Gas reinjection keeps oilfield pressure high and helps maximise crude output.
Abu Dhabi will be able to use that gas again for injection once Dolphin starts, the sources said.
The gas will also substitute fuel oil and gas oil which is being burnt in some UAE power plants.
Dolphin is in talks with Qatar to increase the flow of gas to the pipeline's maximum capacity of 3.5 billion cubic feet per day. But Qatar has called a moratorium on new projects from its giant North Field as it studies the effect of rapid development on the reservoir.
Qatar has become the world's largest exporter of liquefied natural gas, gas chilled to liquid for export on tankers.
Aside from Qatar, the Gulf region is short of gas. Oil major BP said on Wednesday that supply constraints led to gas consumption in the region slowing last year from its 10-year average.
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