Qatar has no plan to shut Dolphin gas pipeline to UAE despite rift

6/6/2017

DOHA/DUBAI (Reuters) — Qatar has no plan to shut the Dolphin pipeline that transports natural gas to the United Arab Emirates despite the severing of diplomatic ties between the two Gulf Arab nations, officials in both countries said on Tuesday.

Saudi Arabia, the UAE, Egypt and Bahrain said on Monday they would cut all ties including transport links with Qatar, the world's top seller of LNG, accusing it of supporting terrorism. Doha denies the accusation.

Qatar supplies roughly a third of global LNG—natural gas that has been converted into liquid form for export.

Industry sources and traders were closely watching for any disruptions to natural gas supplies from Qatar to the UAE and Oman. A shutdown of the Dolphin pipeline would cause major disruptions to the UAE's gas system.

The pipeline, which links Qatar's giant North Field with the UAE and Oman, was operating normally and officials in Doha and Abu Dhabi told Reuters there are no plans to halt gas flows.

"All is normal. There are no plans to close it," an official at state-run Qatar Petroleum told Reuters on condition of anonymity.

Two UAE-based sources said no shutdown was planned. "It will not happen," one source said.

The pipeline was the first cross-border gas project in the Gulf Arab region. It pumps around 2 Bcm of gas per day to the UAE.

The diplomatic dispute has stoked concern that any supply disruption could spill over into global gas markets. Even a partial shutdown would force the UAE to seek replacement LNG supplies.

The UAE could cope with Qatar suspending its two to three monthly LNG deliveries by calling on international markets, but Dolphin piped flows are too large to replace fully.

Mubadala Development Co, run by the Abu Dhabi government, owns 51% of Dolphin, while Total and Occidental each have 24.5%.

Reporting by Tom Finn and Rania El Gamal; Editing by Dale Hudson