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Wed 1 Aug 2007 10:13 AM

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Sharjah in talks with BP, Dolphin

Emirate looking to make up shortfall in supply following delay to key Iranian gas deal.

Sharjah has turned to UK energy giant BP and Abu Dhabi’s Dolphin Energy to supply the emirate with gas following the delay to a key Iranian gas deal.

Sharjah Electricity & Water Authority (Sewa) told Dow Jones on Tuesday the hold-up is now forcing it negotiate with other gas suppliers due to the high cost of meeting the emirate’s power demands through expensive heavy oil, Bloomberg reported.

During the hot summer months domestic production of around 250 million cubic feet a day (cf/d) of gas is only able to met 60% of the emirate’s energy demands.

The emirate was expecting to receive two billion cf/d from Iran through a $1 billion contract with Sharjah-based Crescent Petroleum.

However, Iranian demands for more money then originally agreed have stalled negotiations, delaying the project for over a year.

“We are negotiating with several suppliers including BP and Dolphin Energy to bring gas supply to Sharjah,” Waleed bin Khadem, Director-General of Sewa, told Dow Jones.

“We cannot wait until Crescent brings the gas,” he said, adding that heavy oil was costing between six and eight times more than gas.

Sewa said it is in talks with Dolphin to offtake the full one billion cf/d of the proposed second phase of its pipeline project between Abu Dhabi and Qatar, according to Bloomberg.

Dolphin began transporting gas from Qatar to Abu Dhabi earlier this month through a 364 kilometre pipeline that runs below the seabed.

It has said it plans to pump two billion cf/d through the pipeline by the beginning of next year.

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