Shah Gas Project Online, to Reach Full Capacity

The United Arab Emirates' Shah gas project has started operations and is expected to reach full capacity by year end, the head of state-run Abu Dhabi National Oil Company (ADNOC) said on Monday.

The multi-billion dollar, technically challenging project with U.S.-based Occidental Petroleum (OXY) is meant to produce usable gas from Shah's high-sulphur field.

"Successful commissioning of Shah gas project has started... We look forward to reaching full capacity this year," ADNOC Chief Executive Abdulla Nasser Al Suwaidi told an energy event in Abu Dhabi.

The project to process around 1 billion cubic feet a day (bcf/d) of sour gas into 0.5 bcf/d of usable gas in the remote desert is vital for keeping the UAE supplied with fuel and reducing its growing gas imports.

As well as gas for industry and power generation, Shah will produce significant volumes of condensate, a light oil that can be used to make vehicle fuels.

"With the Shah gas development start-up we will see the UAE accounting for almost five percent of global sulphur production," the UAE energy minister Suhail bin Mohammed al-Mazrouei said at the same event.

The UAE had said it plans to produce 22,000 tonnes of sulphur a day by 2015, which positions it to be a leading world sulphur exporter.

Sulphur is used in the manufacturing of fertilisers and sulphuric acid, which is used in oil refining, wastewater processing and mineral extraction.

ADNOC holds a 60 percent share in the Shah gas development joint venture, called Al Hosn Gas, while Occidental holds 40 percent.

Reporting by Maha El Dahan; Writing by Rania El Gamal