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Sun 13 Jun 2010 04:00 AM

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Distribution triumph

Ibrahim Ahmed Al Ansari, general manager of Dolphin Energy - UAE, speaks exclusively to Oil & Gas Middle East as the finishing touched are being put to its $800 million Taweelah - Fujairah pipeline project.

Distribution triumph
Ibrahim Ahmed Al Ansari, general manager, Dolphin Energy.
Distribution triumph
Distribution triumph
View of the Dolphin Energy gas processing facilities in Ras Laffan, Qatar.
Distribution triumph
Some 120,000 tonnes of line pipe were delivered between 2008 and 2009 for the Taweelah to Fujairah pipeline. Work is expected to be completed this year.
Distribution triumph
The new 240 km, 48 inch pipeline will cross 240 km of desert and mountain – linking receiving facilities at Taweelah with the ADWEC Plant in Fujairah.
Distribution triumph
An engineer inspects the progress being made as the pipeline sliced through the Fujairah mountains.

Ibrahim Ahmed Al Ansari, general manager of Dolphin Energy - UAE, speaks exclusively to Oil & Gas Middle East as the finishing touched are being put to its $800 million Taweelah - Fujairah pipeline project.

It's astonishing to think that the UAE, one of the world's most important energy exporters, is actually energy short itself. However, with rapid economic development has come a colossal expansion in its energy needs, as residential, commercial and heavy industrial facilities vie for the precious gas available.

To meet demand across the Emirates, Mubadala, Oxy and Total combined forces to deliver the region's most ambitious energy grid, which kicked off its gas exports from Qatar's vast North Field to Abu Dhabi almost two years ago.

Indeed, Dolphin Energy will be celebrating the two-year anniversary of gas flows from its Ras Laffan Processing Plant to the receiving terminal in Taweelah, Abu Dhabi in July. The main subsea 48-inch, 364-kilometer pipeline is the largest and longest gas pipeline in the Middle East.

The export pipeline is currently carrying up to a maximum of 2 billion standard cubic feet a day (scf/day) of refined methane gas from Qatar. Its design capacity is 3.2 billion scf/day. Usage of the additional 1.2 billion scf/day capacity is subject to a future agreement between Dolphin Energy and Qatar. Bringing that vision to completion was no easy task, and Ibrahim Ahmed Al Ansari, general manager of Dolphin Energy - UAE, says that proving wrong the hoards of pessimists is the proudest achievement of his career to date.

"I've been with Dolphin since the negotiation of the agreement with the Qataris. From the early days - in discussions with my peers, whenever we discussed the deal, they said Dolphin Energy was a dream - and a dream that was too difficult to come true," explains Ansari. "We told them then: You talk, but we will achieve it...And finally we achieved it. We proved that we could get the support of the governments from Qatar, UAE and Oman, and the support of the shareholders. There is no question this is the biggest achievement that I am proud of. People said it wouldn't happen, but it happened," he beams.

The fact that the 2 billion standard cubic feet of gas so critical to the UAE's ongoing development flows from Dolphin Energy is significant, but even this is not enough to satisfy the country's rapidly expanding demand for energy. There is an extra 1.2 billion scf of capacity in the principal pipeline from Qatar, as well as extra capacity engineered into the UAE and Oman network.

"The forecast in the UAE is around an 8% to 10% increase in gas demand each year, and we expect this to continue for a few years to come. Today in the UAE we are short of energy, which means our potential customers have to use other kinds of fuel for their projects and developments," says Ansari.

Ansari says that expanding the Dolphin Energy network to other countries in the Middle East is not on the company's horizon. "We have no plans to roll the network out beyond the United Arab Emirates and Oman. This is our territory and our mandate. Bringing enough gas to these customers throughout the project life will in itself be a significant achievement."

Demand for gas comes in peaks and troughs, with demand highest in summer when the region's air conditioners are all working at maximum capacity and lowest during the winter.

As well as seasonal variation, it may, quite sensibly be expected that during economic slowdowns demand for gas would slump. However, demand across the UAE, and in particular the Northern Emirates, has continued to grow, in spite of the recessionary impact on economic development. "That is what we expected too. Certainly it was widely expected to drop, but in fact we saw an increase in demand for gas. One would have thought that the downturn in Dubai would prompt a fall in demand but the opposite was the case. Demand increased in Abu Dhabi, in Dubai and throughout the Northern Emirates."
Getting gas

Qatar has placed a moratorium on any new exploration and production on the North Field from which Dolphin receives its gas. This is not due to expire for at least three more years, but Ansari is optimistic about the chances of securing more gas for the Dolphin Energy project.

"The moratorium which has been put in place by the government of Qatar has been enacted with good reason. They want to finish all of their projects and then evaluate the reservoir condition and behaviour before giving the green light to any new projects," explains Ansari.

"However, there are other projects already operational in Ras Laffan, and some of those will have surplus gas, particularly at certain times of the year - which could be made available to us," he continues.

This interruptible gas is not in any way guaranteed for Dolphin, but the possibility of surpluses being made available seems to be growing.

Much of the LNG capacity which has been brought on stream in the last two years was originally earmarked for US markets. However, with significant gas finds and the ongoing development of shale resources in the US, it is thought less Qatari gas will go to the West.

In May, Qatar's Energy Minister said the projected flows of gas to America was dropping significantly. Qatar may end up exporting just 6 million metric tonnes a year (mty) of LNG to the US after diverting as much as 20mn mty to other countries, Deputy Prime Minister and Minister of Energy and Industry HE Abdullah bin Hamad al-Attiyah said in an interview published by the Middle East Economic Survey last month.

Al-Attiyah said that Qatar "may divert 12-20mn mty" away from the US market. "This means our gas exports to the US would remain in the range of 6mn mty," he said.

Qatar's LNG trains will no doubt pick up this slack and package the gas for sale to the country's Asian trading partners, but the example shows that even the largest projects can divert gas from original capacity plans to flexible projects and seasonal demand.

Domestic production

Abu Dhabi itself is sitting on huge gas resources, but much of it is extremely rich in sulphur and carbon dioxide content, making it highly corrosive and expensive to process and to market for commercial sale.

That said, ADNOC and its group of subsidiary companies are pushing ahead with several gas related projects, including the hugely sour Shah Field. Ansari says he is not worried by additional gas coming on stream from domestic fields.

"The new projects in Abu Dhabi will be complimentary to our gas. Today the deficit stands at around 2 billion scf, and much of the new gas being produced in Abu Dhabi will be used for reservoir control and pressure maintenance, not explicitly for retail gas. Dolphin will remain relevant for the whole of its 25-year scheduled lifespan."
Project execution

The Dolphin Energy story has largely shifted from project execution to its operational stage now, but exciting new developments are still underway, and a major pipeline extension from Abu Dhabi to Fujairah is due for completion later this year.

The challenge of delivering huge quantities of gas from Qatar to Fujiarah, crossing the Emirates' most extensive mountain range in the process is a colossal undertaking in its own right, as the stunning images from Oil & Gas Middle East's site visit show.

The Taweelah - Fujairah pipeline extension project, which is slated for completion in December of this year, involves the design, build, and laying of a substantial, 48 inch pipeline, which traverses some 240 kilometers through the heart of the UAE. The pipeline crossed through desert areas of Abu Dhabi, Dubai and Sharjah then over the mountains of Ras Al Khaimah and Fujairah itself.

The line pipe has been provided by Salzgitter Mannesmann International of Germany.

When complete the pipeline will supply gas to the upcoming Fujairah 2 Power and Desalination Plant. This will be built next to the existing Fujairah 1 plant at Qidfa, on the Arabian Sea north of Fujairah city, which already receives gas from Dolphin Energy via the company's Al Ain to Fujairah pipeline.

The geographical and engineering challenges are evident from the photographs depicted here, but the administrative process also posed significant hurdles for the Dolphin Energy team to overcome.

"Getting the appropriate approvals from all the relevant authorities for a pipeline crossing through four municipal jurisdictions - Al Ain, Sharjah, Ras Al Khamaih and Fujairah was also quite difficult," explains Ansari.

"Yet despite all of the challenges we faced we are delighted with how smoothly everything has come together. We achieved our first completion target ahead of schedule, and we are on target to finish in the fourth quarter."

Looking ahead

As the focus of daily business has shifted to operations and maintenance, Ansari says cost control and optimisation have become the watchwords. Whilst many major upstream projects across the region have increasingly outsourced major maintenance contracts for a period of years, the general manager says Dolphin Energy has retained its principal gas and infrastructure work in-house.

"There are many schools of thought about how to best manage operations and maintenance contracts and what should be farmed out. What we do at Dolphin is operate and support our own facilities in house, in conjunction with supporting contractor services. We have our own manpower which can handle the core of our operations, supplemented by contractors for non-core operational maintenance, such as building and air-conditioning support."

A further challenge incumbent on all major companies in the region is building and maintaining a strong national workforce amongst its ranks. Ansari believes that so far Dolphin has achieved much, but he is still punching for a higher level of nationalisation in the United Arab Emirates and Qatari divisions.

"The measure for success should be judged by the percentage of UAE nationals within the workforce. In the UAE itself we have reached 40%, and our target is to reach 50% by 2012. To me this represents a challenge, but it is achievable. In Qatar we have reached around 23% of the workforce, comprised of Qatari's and UAE nationals. We benchmark ourselves against our peers, and we make sure we continue to be an employer of choice for UAE national and Qatari's to join."

Ansari says the current approach is proving successful, but that he remains mindful of maintaining the special corporate culture which the Mubadala, Total and Oxy partnership has built to date.

"We are like a coin with two faces," he says. "We are local, but we have the partnership of Total and Occidental too, and by integrating all of these together we have created the Dolphin culture. When we compare ourselves to our peers we talk about the leading oil and gas companies operating in the United Arab Emirates, Abu Dhabi and Doha, which includes a mixture of national and international companies."

Ansari wraps the interview up by noting that Dolphin Energy's overall objective is to create long-term economic wealth and new business opportunities for GCC citizens, far into the future. Having overcome some lofty barriers to get where it is today, and with the notable success the company has delivered to date, it's difficult to imagine that it won't.