Shell exits Abu Dhabi sour gas project

naturalgasplant dukeenergy flickrSeveral major oil and gas projects are either being delayed or cancelled, mainly due to the ongoing oil glut. (Image source: Duke Energy/Flickr)Royal Dutch Shell Plc has bowed out of the Bab sour gas project as it ‘doesn’t fit with the company strategy’ in the present economic climate

The project was being run along with Abu Dhabi National Oil Company (ADNOC). In 2013, ADNOC roped in Shell as its partner for the Bab sour gas project, by giving it a 40 per cent stake. Gas sales were supposed to begin in 2020.

Shell’s latest exit from a major project follows its withdrawal from two projects in Alaska and Canada last year, stated a Bloomberg report.

According to consultants Wood Mackenzie Ltd, around US$380bn in investments have been deferred to early next decade as companies are going into “survival mode”. Energy producers are cancelling or delaying projects, taking billions of dollars of writedowns and cutting thousands of jobs as the crude-price slump forces them to trim spending, added the Bloomberg report.

The Bab field is located 150 km south of Abu Dhabi, and is the largest onshore field in the emirate (based on total area). Its sourness indicates the presence of hydrogen sulphide, removal of which is an expensive process.

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