Home / SPECIAL REPORTS / Spl Report: Will double sulphur production - Adnoc
Spl Report: Will double sulphur production - Adnocby Indrajit Sen on Mar 12, 2017
Traditionally, and particularly in this region, the sulphur that is produced as a result of the separation of hydrogen sulphide (H2S) from sour gas to make the gas sweet has been considered as a by-product, which being toxic has been seen as having little value.
While for decades, North America and especially western Canada, has thrived on producing and exporting sulphur, the Middle Eastern oil and gas producers – despite sitting on huge reserves of H2S – have essentially neglected the benefits of the significant amounts of sulphur they have been producing in the process of treating their gas.
The Abu Dhabi National Oil Company (ADNOC) has been an exception though. Having realised the potential of the sour gas and sulphur segment years back, not to mention the immense economic value of sulphur vis-à-vis industrial applications globally, the UAE energy giant has been commercialising the associated sulphur output from its key sour gas projects – by virtue of which the UAE presently is the world’s largest sulphur exporting country. Fairly speaking though, what has partly helped Abu Dhabi achieve this feat is the fact that the US and Canada consume most of the sulphur they produce, despite recording far higher levels of sulphur output than the UAE.
However that might change in a decade, if ADNOC’s ambition is to be realised. During the recent Middle East Sulphur Conference organised by CRU Events in Abu Dhabi in February, a senior ADNOC executive announced that the UAE major plans to capitalise on increased sulphur processing capabilities, by doubling production.
During his keynote speech at the inaugural edition of the event, Omar Suwaina Al Suwaidi, ADNOC’s Gas Management director said the company’s clear focus is on retaining and strengthening the competitive edge, and on maximising the value of the UAE’s natural resources, including sulphur.
“We produce 6mn tonnes of sulphur per year and we expect production to double over the coming decade, due to the increased volume of sulphur coproduced from our existing and planned sour gas processing facilities. Not only will this cement our position as the world’s number one sulphur exporter, it will also make the UAE the largest producer of sulphur in the world,” Al Suwaidi was quoted as saying in a press release.
Digressing from the traditional view of sulphur as a by-product of sour gas processing, ADNOC has affirmed that it believes sulphur to be a commercially viable commodity that offers the company opportunities to create added value from its resources and improve margins. “In the lower for longer oil price environment, it is imperative to effectively manage costs and seize value opportunities where they arise,” Al Suwaidi said. “It is about unlocking the full potential of every single asset and maximising returns for Abu Dhabi, ADNOC and the nation.”
ADNOC has also announced that it will utilise its increased sulphur capabilities to support the development of a local sulphur products industry, including advanced fertilisers. Internationally, the company plans to enter into partnerships in markets that manufacture phosphate based fertilisers in Africa, Asia, South America and Australia. “Our increased focus on maximising the value of our sulphur resources will not only generate additional revenue, it will also contribute to the UAE’s strategic objective of diversifying the nation’s economy.”
Over the past five years, the production of sulphur in the UAE has been growing very rapidly, increasing from 2mn tonnes in 2010 to 6mn tonnes in 2016. CRU says it predicts that output could rise up to 8mn tonnes by the end of 2020. The increase in production is due to new gas fields in ADNOC’s Shah and Habshan sour gas projects and a surge in population which has driven up gas demand, leading to a surplus.
“The nice thing is that companies like ADNOC are seeing that the sulphur is a valuable product as well. So they are taking that approach that the sulphur is not just a by-product. That’s why they want to get involved in the sulphur value chain,” Angie Slavens, managing director of UniverSUL Consulting, said.
“They (ADNOC) have already got plans on the horizon to expand the Shah project, which is already one of the biggest sulphur producing complexes in the world. That is going ahead now and they are already in the FEED stage of the project. They are looking at several new gas developments and moving into the FEED stage on those projects in the next year or so,” Slavens, whose consulting firm has been advising ADNOC since 2014, told this magazine.