DUBAI Apr 16, 2007 Dow Jones Newswires
BP PLC (BP) and Total S.A. (TOT) have submitted bids for a multi-billion-dollar sour gas development in Abu Dhabi that will help the United Arab Emirates' largest emirate meet soaring gas demand, company officials said Sunday.
Pre-qualified international oil companies including BP, Total and Royal Dutch Shell PLC (RDSA.LN) had been asked by Abu Dhabi National Oil Co. (ADO.YY), which produces almost all the oil in the U.A.E., to submit bids for the estimated $10 billion sour gas development by April 15.
"We made a submission to Adnoc. It is a competitive process and details have to remain confidential," a BP spokesman told Dow Jones Newswires by phone from Abu Dhabi.
A Total official also confirmed that the company had submitted a proposal for the project when contacted by Dow Jones Newswires.
The project, the U.A.E.'s largest-ever non-associated gas development, could cost as much as $10 billion and is crucial to meet fast-rising gas requirements in the country.
Occidental Petroleum Corp. (OXY) Chief Financial Officer Steven Chazen told Dow Jones Newswires at a New Orleans energy conference in early April that the company was also preparing to bid for the project.
It is not clear whether Exxon Mobil Corp. (XOM), which was also preselected by state-owned Adnoc, and Shell submitted proposals Sunday to participate in the final stage of the tender.
A BG Group PLC (BRG) spokeswoman told Dow Jones Newswires earlier this month that the company would not pursue the project any further.
The successful bidder will enter into a joint venture with Adnoc to help it develop some of Abu Dhabi's fields containing sour gas, highly sulfuric natural gas that is more costly and challenging to process because its corrosive nature requires special handling and infrastructure.
Abu Dhabi has more than 200 trillion cubic feet of gas reserves, the fifth largest in the world, most of which are sour.
Abu Dhabi last year decided to move ahead with the development of sour gas as high oil prices have made the project commercially viable and domestic gas demand has jumped in recent years.
Natural gas consumption is rising as the country's population is growing and the government is moving ahead with the development of new industries with high gas requirements such as aluminum and petrochemicals.
The sour gas project, which is expected to produce 3 billion cubic feet a day, is set to provide gas for these new industries and for reinjection in oil fields to maintain production levels.
Adnoc chief executive Yousef Omair bin Yousef said in the beginning of the year that a contract award on the project was expected around mid-2007.
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