WASHINGTON // Executives from the Abu Dhabi-based Union Railways have made the US their first stop on a trip designed to spark interest from rail companies expected to bid on a 1,300km freight and passenger network throughout the Emirates.
The company, established last July, is behind plans for a Dh30 billion (US$8.16bn) to Dh40bn rail network that will play a vital role in the industrial development of the UAE, linking ports, airports and manufacturing zones. The delegation, led by Hussain al Nowais, the chairman of the UAE Government-owned Union Railways, and Richard Bowker, the chief executive, met regulators in Washington on Monday ahead of a week-long tour that will include meetings with business leaders, operator companies and train equipment makers in several other US cities. The visit is also designed to get a first-hand look at the US freight rail network.
The first contracts are due to be awarded by the end of this year, and parts of the rail system are expected to be operational by 2014. "We are trying to see as many different things as we can," said Mr Bowker. "I think the US has a tremendous history and pedigree in railway operations and we want to learn and see, and share our project, to see what people think of it and maybe get some good ideas."
The initial focus will be on freight, to help facilitate the growth of rail-reliant industries such as aluminium, steel and petrochemicals. Eventually, the network will include passenger rail. Union Railways said bidding on the first phase of the project, a rail line linking the Shah gasfield in Al Gharbia and the Ruwais oil and petrochemicals complex, would begin next month. US companies could have an advantage in the bidding because of their experience with their freight rail network, Mr al Nowais said.
"The US tends to focus on freight, which is really the object of our rail," he said. Mr Nowais has also visited China and France, and will soon travel to Spain, Germany and Italy. "This is going to be an international tender, so companies from all over the world are welcome." Mr al Nowais's comments suggest that a rail line is emerging as the preferred method to transport sulphur, rather than a pipeline, which has also been under consideration for the Shah "sour" gasfield being developed in a $10bn project.
Sulphur, which is used mainly to make fertilisers, rubber and sulphuric acid, is a major by-product from processing sour gas, which contains high concentrations of hydrogen sulphide. Abu Dhabi National Oil Company (ADNOC) and the US oil company ConocoPhillips formed a joint venture company for Shah last summer, but still have not made a final decision on the project. That is partly because of uncertainties over the feasibility of transporting about 7 million tonnes of sulphur a year to export facilities at Ruwais.
Originally, they had proposed a 275km liquid-sulphur pipeline, but the bidding deadline for the pipeline construction deal has been pushed back twice this year. Liquid sulphur is tricky to transport because it is corrosive and it thickens as it heats up. To flow through a pipeline, it must be kept within a narrow temperature band, which is difficult over long distances. * additional reporting by Tamsin Carlisle