Contracts for the UAE's $10 billion Shah gas project were 40-50 per cent cheaper than expected, the chief executive of the Abu Dhabi Gas Development Company (ADGDC) said on Monday, after economic crisis made firms cut prices.

So far, contracts worth $5.6 billion have been awarded. The plant would process about 1 billion cubic feet per day (cfd) of raw gas, of which around 540 million cfd of gas would flow into the UAE's grid.

'What we tendered and got offers for was below the estimates. This could be because of the economic crisis.

Countries had decided to shelve projects but the UAE went on,' Saif Ahmed al-Ghafli told reporters on the sidelines of a signing ceremony, where four international firms were awarded contracts, including for gas pipeline construction.

Details of the contracts and the names of the winners would be announced soon, he said.

The UAE is the world's third-largest oil exporter but is struggling to find enough gas for domestic needs. It said it would go ahead with Shah even without US major ConocoPhillips, which exited the project in April.

'The project is on track to be completed by the third quarter of 2014. We are committed,' Ghafli said.

In June, industry sources told Reuters Royal Dutch Shell, which lost out in the 2007-2008 auction for the project, would step in as a partner.

'My expectation is that these [firms] in the last [auction] run will come back and talk to Abu Dhabi National Oil Company (ADNOC), and there may be new ones [firms],' he said, without giving further details.

Shell was one of four companies that bid for the contract, which Conoco won in February 2008. The others were the US companies Exxon Mobil and Occidental.-Reuters