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Tue 13 May 2008 10:52 AM

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Infrastructure delay holds back Oman gas imports

Dolphin Energy gas deliveries pushed back until August or September - officials.

Abu Dhabi-based Dolphin Energy will begin supplying natural gas to Oman in August or September, a few months later than planned as Oman has yet to complete the infrastructure, officials said on Monday."In August or September we expect the gas to come to Oman," Ahmed Al-Wahaibi, chief executive of Oman Oil Company, told newswire Reuters at the inauguration of the Dolphin gas plant in Qatar.

The Dolphin project linking Qatar's giant North Field with the UAE and Oman was the first cross-border gas project in the Gulf Arab region. It has pumped around two billion cubic feet a day of gas from Qatar to the UAE since February.

Oman, whose $40.3 billion economy grew 7.2% in real terms in 2006, is struggling to meet both domestic demand and its gas export commitments.

Dolphin has a contract to supply 200 million cubic feet a day of gas to Oman.

Omani officials said last month they expected gas supplies from Dolphin to start in June.

"There is some issue with the gas compression," said Al-Wahaibi. "It is on our side of the pipeline," he said.

A gas compressing unit compresses gas to ease pumping through the pipeline.

Dolphin General Manager Ibrahim Al-Ansari said the firm was still working on gas metering stations in the UAE. "The gas is there... on our side we are ready to export."

As Dolphin waits for the infrastructure to be completed, it is supplying the gas that would have been pumped to Oman to the UAE's Federal Electricity and Water Authority (Fewa) and the federation's northern emirates of Ras Al-Khaimah and Sharjah.

Dolphin will end those supplies when it begins exporting to Oman. It will reverse the direction of the pipeline. That pipeline was the first to carry gas across borders in the Gulf Arab region when Oman began pumping to the UAE in 2004.

Mubadala Development Company, run by the government of the UAE emirate of Abu Dhabi, owns 51% of Dolphin while France's Total and US Occidental each have a 24.5% stake.

The final cost of the entire Dolphin project was around $4.8 billion, Al-Ansari said, up from initial estimates of around $3.5 billion.

The 364 km pipeline for the gas exports to the UAE was completed in 2006. It produced its first gas from the QatarGas facilities last June and began using it in March last year to bring 400 million cubic feet per day of gas processed by state-owned Qatar Petroleum to the emirate of Dubai.

Qatar maintains a moratorium on new gas projects from its North Field, as it studies the effect of rapid development on the largest reservoir of pure gas in the world.

Qatari Oil Minister Abdullah bin Hamad Al-Attiyah said on Monday it was not in discussions to boost Dolpin supply and would not discuss further supplies with anybody until it had completed its studies of the gas field's performance. (Reuters)

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