EXCLUSIVE: UAE to fix gas prices to drive sour gas developments

23 May 2017

Energy minister says country will focus on sour gas developments to meet energy targets

The UAE is working towards fixing gas prices to enable the development of high-cost sour gas developments, according to Energy Minister Suhail al-Mazroui.

Al-Mazroui told a conference in Abu Dhabi that the UAE will focus on sour gas developments to meet its long-term energy needs and reduce the need to rely on costly liquefied natural gas (LNG) imports.

Sour gas contains significant amounts of hydrogen sulphide, which must be removed before the gas is used, making sour gas projects often more expensive and complex to carry out.

“International oil companies (IOCs) always come and complain about the local gas price,” Al-Mazroui told the EIC Connect Oil & Gas conference in Abu Dhabi on 23 May. "But the good news is: we will fix it for you. So we are working on fixing the local gas price to enable such developments.

“There is plenty of gas in the emirates, but it is sour. Anything to do with reducing the cost of sour gas is going to be of interest. We cannot afford to only import LNG from outside.” 

The energy minister said gas is expected to make up about 38 per cent of the country’s energy mix by 2050, despite the targeted growth of renewables, which are set to provide 44 per cent.

Abu Dhabi completed its first major sour gas development – overseen by a joint venture of Abu Dhabi National Oil Company (Adnoc) and US-based Occidental Petroleum – at the onshore Shah field in 2016, with a total investment of about $10bn.

The Shah development is now set to be expanded in addition to new sour gas schemes at the onshore Bab field and offshore Hail and Ghasha fields.

MEED revealed on 23 May that US engineering group KBR is set to be awarded the project management consultancy (PMC) contract on the Hail and Ghasha sour gas development.

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