If you were to ask any resident of the UAE about Etihad Rail, he or she might vividly recall news articles or pictures about the railway and perhaps shed light on the historical significance of such a big infrastructure project.
But if you asked him or her: “What is the first thing this railway will transport?” the answer would be a long silence. The answer is nothing but bright yellow sulphur.
Sulphur is element number 16 in the periodic table and has an important role in our lives. It has one of the most distinctive chemistries among the elements and is vital in producing gunpowder, rubber, fertilizers and other chemical compounds.
Etihad Rail is in operation with just one major initial objective: to transport elemental sulphur from remote fields such as Shah and Habshan to Ruwais for export.
We reached this point because of an increase in domestic energy demand, in the country and in Abu Dhabi in particular. This demand requires investment in sour gasfields, which contain significant amounts of hydrogen sulphide (a toxic gas with an odour similar to rotten egg), carbon dioxide and natural gas, mainly methane. Development of these fields is done by separating hydrogen sulphide, an undesired product because of its toxicity, from natural gas, followed by converting hydrogen sulphide into elemental sulphur. This conversion is a must before natural gas is used in generating electricity.
The estimated future production of the element in the UAE is close to 10 million tonnes a year, which will place the country as the top producer of sulphur in the world.
The amount of sulphur expected to be produced from Shah field alone is close to 3 million tonnes a year, equivalent to the yearly production of sulphur for the entire country of Japan.
The conventional wisdom tells us that being known as the largest producer of a vital commodity such as sulphur is good news, but the economics of sulphur showed that this element is traded at modest prices. Sulphur spot prices hover near Dh600 to Dh1,200 per tonne, compared to Dh140 million per tonne for gold. These prices of sulphur are low compared to the significant investment required to separate sulphur from natural gas in the first place.
Further, the economics of scale show that the price of sulphur will go down if more of it is produced. This scenario is already happening, as more sulphur is currently produced than consumed. It is important for the UAE to work on solutions to mitigate the issue of sulphur prices through various approaches, and chief among them is research to create new value for sulphur through the development of novel applications.
At the Petroleum Institute, we have been working on projects to solve the above issue for more than three years. With support from Abu Dhabi National Oil Company and its group of companies, we were able to come up with novel applications for sulphur that can not only be used immediately but can also support a continuous line of home-grown technologies that contribute to the Abu Dhabi Vision 2030 plan for a knowledge-based economy.
Among the most promising applications is using sulphur in fabrication of thermoplastic-based nanocomposites, which can lower the cost of manufacturing materials such as polythene and polystyrene. A patent application has been filed for this invention with support from the Abu Dhabi Technology Development Committee.
While the list of proof-of-concept experiments has mushroomed in our lab in the past year, the outlook is promising scientifically, technologically and economically. Our focus is on novel applications of the element and not on classical ideas and applications that have been reported in the scientific and business domains.
The reasons for this approach are two-fold. On the one hand, it is the right time for the UAE to be an exporter of finished products and not just raw materials. On the other, approaching the problem from the most fundamental aspect is the most rewarding endeavour from a research and development point of view.
During the UAE’s Year of Innovation in 2015, the development of new applications for elemental sulphur holds promise for the country’s economy in the long run. The first passenger on board Etihad Rail is one of the most important ones.
Saeed Alhassan Alkhazraji is an assistant professor in the department of chemical engineering and the director of the Gas Research Centre at the Petroleum Institute.
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Watson 42; Munaf 3-20
Rajputs 96-0 (4 ov)
Shahzad 74 not out
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Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
Killing of Qassem Suleimani
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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Label: Warner Records
Number of tracks: 11
Rating: 4/5