Qatar Shrugs Off Saudi Plan to Block UAE Gas

DUBAI (Dow Jones Commodities News via Comtex)

Qatar has shrugged off Saudi Arabia's reported plans to block the Qatar-UAE Dolphin gas pipeline as "not serious", a senior energy official said Tuesday.

"We don't think it is very serious. We have been working for a long time on this, and too much expenditure has been made," the Qatari official said.

He was referring to a Bloomberg report citing a memo from the Saudi government faxed to one of the pipeline's financiers, saying that the pipeline passes through Saudi territorial waters and that Riyadh hadn't given its consent.

Dolphin Energy, 51% owned by the emirate of Abu Dhabi, along with Occidental Petroleum (OXY) and Total (TOT), will provide 2 billion cubic feet a day of gas from Qatar to the UAE and Oman by 2007.

The official said Qatar, which is supplying the natural gas for the sub-sea pipeline between the two Gulf states for use in the United Arab Emirates, hasn't received the memo.

A Dolphin Energy spokeswoman declined comment and couldn't confirm if a company statement on the matter would be issued.

The Qatari official said if there is an issue over the sub-sea pipeline, it is a matter for the UAE and Saudi governments to resolve.

A Gulf official, who declined to be named, said the pipeline will be completed within a few weeks. He said international and local partners of the Abu Dhabi-led project thoroughly checked all paperwork before investing.

Abu Dhabi officials claimed the 1974 border treaty gives the UAE underwater rights to areas through which the Dolphin pipeline passes, thereby obviating any need to seek Saudi approval ahead of construction.

To date, Saudi has only publicly objected to Qatar's plans to supply natural gas to Kuwait, as this stretch of the pipeline would run through Saudi territorial waters.

Since last year, UAE officials have upped the tempo on long-standing claims to territory held by its larger neighbor.

In December, the UAE published a map showing the border of the UAE extending through Saudi territory to reach the border of Qatar, land ceded to Saudi Arabia as part of the 1974 border pact.

Copyright (c) 2006 Dow Jones & Company, Inc.

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