Under the terms of the new agreement in principle, Oxy will hold a 40 per cent participating interest in a 30 year contract, while Abu Dhabi National Oil Company (ADNOC) will hold the remaining 60 per cent interest.

The Shah gas project involves development of high-sulphur content reservoirs within the Shah field, located onshore approximately 180 km southwest of the city of Abu Dhabi.

The project will involve development of several gas-gathering systems, construction of new gas and liquid pipelines and processing trains to process 1 Bcf/d of high-sulphur content gas, which is anticipated to produce approximately 500 MMcf/d of network gas and a significant amount of condensate and natural gas liquids.

In May 2010 ADNOC awarded Saipem the engineering, procurement and construction contract for approximately 250 km of gas, condensate and natural gas liquids pipelines for the project.

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ADNOC is already in the process of developing the field with the majority of project engineering procurement and construction contracts already awarded. Production from the field is scheduled to begin in 2014.