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Thu 31 Aug 2006 08:00 PM

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Occidental: Dolphin project still on schedule

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Occidental Petroleum said last month that the US $3.5 billion Dolphin Gulf gas project is on schedule and will have substantial production next year, seeking to allay fears that the project has been scuppered by Saudi Arabia’s border dispute with the United Arab Emirates (UAE).

Occidental and French oil company Total both hold minority stakes in the project, which is intended to supply gas from Qatar to the UAE.

Company officials told Reuters there was no cause for concern when asked about reservations expressed by Saudi Arabia earlier this month on the route of the pipeline.

“Laying of the pipeline is essentially complete, and based on the information available to us, we see no reason for any concern over the border issue between Saudi Arabia and the Emirates,” said Occidental CEO Ray Irani.

He would not, however, when asked by reporters, say when the Dolphin project would begin production.

Saudi Arabia, in a move that may rein in the economic growth of the United Arab Emirates, apparently blocked a gas pipeline from Qatar to the UAE, last month, as the two nations continue a low-level border.

The undersea pipeline allegedly crosses Saudi territory, and the kingdom said in a fax memo to the National Bank of Abu Dhabi that the line “cannot be constructed without agreement from the kingdom.”

The UAE had planned to import 3.2 billion cubic feet of natural gas per day through the pipeline that’s now on ice. Gas demand in the nation is set to quadruple to 13.5 billion cubic feet a day over the next 25 years.

Saudi Arabia made it clear in the fax that no permission was sought from the kingdom to build a pipeline that passes through its maritime waters and so it will be blocked.

Total said last month that the move had put back the project’s completion date till next year.

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