Dubai is planning to import liquefied natural gas (LNG) for use in power generation, with the Dubai Supply Authority (Dusup) developing proposals to build a terminal at Jebel Ali.

It is expected that the terminal will initially import LNG from existing sources such as Qatar and Egypt, and may also purchase gas from the Far East on the international market. In the longer term, it could also import gas from Iran if issues delaying Tehran’s LNG projects can be resolved.

Contractors have been invited to prequalify for a construction contract for the terminal in Dubai. An award is expected by August and completion is targeted for the first quarter of 2010. The works include building a jetty, landing areas, a 1.5 kilometre-long sub-sea pipe, gantry cranes and other loading facilities. The UK’s Halcrow is the consultant.

Gas availability is a growing concern for Dusup and Dubai Electricity & Water Authority (Dewa). According to a prospectus issued by Dewa ahead of a proposed bond issue last year, Dubai has enough gas supplies to fuel power generation in 2008, but from 2009 onwards the emirate will need to secure more gas supplies or start using alternative energy sources.

Between 2008 and 2012, Dewa plans to invest $19bn in new projects to increase its electricity and water production capacity by 2.5 times. The additional cap-acity is required to meet a projected surge in electricity demand, which has been growing at 15 per cent a year.

Dewa says it will continue to develop plans for coal-fired power plants, and has commissioned a study into the feasibility of a hydrogen power plant.

Depending on the outcome of the study, Dewa will decide whether to pursue the project or opt for conventional coal-fired power plants.

It is also considering options for nuclear-powered plants.

Another plan under consid-eration is importing electricity directly from Iran.

In 2007, Dewa signed a memorandum of understanding to buy electricity from Iranian state power generation and transmission company Tavanir using a sub-sea cable with a high-voltage direct current.

Two private LNG import projects are already being considered in Dubai. If either proceeds, it would give Dubai additional leverage when purchasing gas on the international market.

Dubai Multi Commodities Centre (DMCC) and Calgary-based LNG Impel signed a memorandum of understanding in 2006 to set up an LNG storage, blending and trading hub.

Little progress has been made on the project and it could yet be relocated to Fujairah.

The second proposed scheme involves the construction of a 1.8 billion-cubic-metre gas storage facility over a 5.2-square-kilometre site at Techno Park. Energy companies from Asia, Europe and the US are understood to be interested in bidding for the licence to develop and operate the facility (MEED 27:2:08).