Etihad Rail signs up DB Schenker to run first freight line

Under the agreement, the German partner could also consult on future phases such as passenger transport connections.

The first phase of the UAE’s planned railway network will bring sulphur cargoes 264 kilometres from the Shah sour gasfield to the coast. Rich-Joseph Facun / The National

Etihad Rail has hired Europe’s biggest railway company to run its first freight line as it gears up to ship sulphur by the end of the year.

The government-owned transportation developer and DB Schenker Rail, a subsidiary of Germany’s Deutsche Bahn, signed a joint venture to operate and maintain the first phase of the UAE’s planned railway network, which will bring sulphur cargoes 264 kilometres from the Shah sour gasfield to the coast.

Under the agreement, for which Etihad Rail did not specify a dollar value, the German partner could also consult on future phases such as passenger transport connections.

Al Hosn Gas, the joint venture between Abu Dhabi National Oil Company (Adnoc) and Occidental Petroleum that is developing Shah, said it was on track to bring the project online by December. The projection reverses predictions by Adnoc officials in January that the project's start would be delayed until 2015.

“We’re confident we will be starting by the end of the year,” said David Keat, the vice president of technical and engineering support at Al Hosn. “My estimate is based on the current reality. You’re talking about Adnoc’s several months ago, which is slightly different. We won’t know until December 31, really, but we’re very comfortable that we’ll be able to start up by the end of this year.”

Construction on the gas processing plant, which will turn highly corrosive and potential deadly sulphur into pellets that can be transported by train, was 94 per cent complete as of February, said Mr Keat.

The US$10 billion project is due to boost the emirate’s gas production by 1 billion standard cubic feet per day to 6 billion, fuelling ambitious economic diversification plans in petrochemicals and other energy-intensive industry.

The railway joint venture announced yesterday will bring critical transport knowledge to the UAE, said Nasser Alsowaidi, the chairman of Etihad Rail.

“Deutsche Bahn and DB Schenker Rail are the ideal partners to help spearhead a successful, modern railway for the UAE for generations to come,” he said. “Facilitating knowledge transfer and sharing of best practices, the joint venture – Etihad Rail DB – is a very positive step forward for Etihad Rail, furthering our commitment to provide the UAE with a world-class, modern, integrated and efficient rail network that will drive economic growth and social development.”

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