Dubai confirms LNG plans

20 April 2008

Dubai Supply Authority (Dusup) has confirmed that it plans to import liquefied natural gas (LNG) by building a regassification terminal at Jebel Ali.

Dusup says that the floating LNG regassification facility will supplement the emirate’s existing supplies of gas during summer peak demand. It has selected the UK/Dutch Shell to advise it and project manage the development phase of the scheme.

Shell will also be the main LNG supplier and will continue to provide advice to Dusup once the facility is completed in 2010. Shell will source most of the LNG from Qatargas 4 in Qatar, a joint venture of Shell and Qatar Petroleum, under a 15-year long-term supply agreement.

Golar Freeze, an existing LNG ship, will be chartered by Dusup from Bermuda-based Golar LNG Company and converted into a floating storage and regassification unit to be moored offshore within DP World’s Jebel Ali terminal. LNG ships will moor alongside the Golar Freeze to offload their cargoes. Gas will be piped through a sub-sea pipeline from the Golar Freeze into the Dubai natural gas pipeline network to industrial customers.

The regassification capacity of the Golar Freeze will be 3 million tonnes a year, equivalent to 400 million cubic feet a day of natural gas.

“Energy demand is growing rapidly in Dubai because of the strong growth of our economy,” says Sheikh Ahmed bin Saeed al-Maktoum, Dusup chairman. “Access to the global LNG market will help Dubai to meet peak summer demand in a more sustainable way, reducing emissions and improving local air quality. Dubai will also benefit from our peak summer demand being countercyclical to the global winter demand peak in the LNG market.”

MEED revealed in early April that Dusup was planning to build an LNG terminal at Jebel Ali to import gas for its power generation needs. Contractors have been invited to submit prequalification applications to build the terminal (MEED 10:4:08).

Like many Gulf states, Dubai is struggling to source feedstock for its rapidly rising energy requirements. Kuwait is also planning to import LNG during the summer months.

Government-owned Dusup has sole responsibility to supply gas users in Dubai. It also owns the emirate's gas pipeline network.

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