Abu Dhabi opts for quick fix on gas imports

08 February 2016

Floating LNG terminal will plug the gap as delays hit larger project in Fujairah

Reports that Abu Dhabi plans to install a floating liquefied natural gas (LNG) terminal this year suggest the emirate is expecting an acute shortage of gas supplies in the coming years.

News agency Reuters, citing industry sources, said that state-owned Abu Dhabi National Oil Company (Adnoc) will installing the a 1 million tonnes a year (t/y) facility in the second half of 2016.

The UAE became a net gas importer in 2007 after the start-up of the Dolphin pipeline linking Qatar’s North Field to Abu Dhabi. Gas imports increased further when Dubai began importing LNG in 2011.

The installation of a new floating facility suggests that Abu Dhabi will need additional gas supplies before its planned onshore LNG import facility in Fujairah comes on stream.

Emirates LNG, a joint venture of Abu Dhabi-based investment vehicles Mubadala Petroleum and International Petroleum Investment Company (Ipic), originally planned to start up the first phase of its Fujairah terminal in 2016.

However, the project has been delayed by a change of scope and a re-tender of the engineering, procurement and construction (EPC) contract.

Emirates LNG received commercial EPC bids on the latest scope in March 2015 but there has yet been no contract award for the proposed 9 million t/y capacity project. It is now unlikely to be completed until 2019 at the earliest.

The new floating LNG terminal in Abu Dhabi will likely act as a short-term fix to meet gas demand until a more permanent solution is reached. This could either come from completing the Fujairah LNG facility, reaching an agreement with Qatar to import more pipeline gas, or boosting domestic gas supplies by developing unconventional gas assets.

Qatar declined its planned increase in pipeline exports due to a pricing despite, but it is understood that Abu Dhabi has been importing additional Dolphin gas based on LNG prices.

Mark Watts

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