UAE shelves gas import terminal project

28 February 2017

Tenders on $2bn-$3bn Fujairah scheme cancelled two years after bid submission

Emirates LNG has shelved its planned $2bn-$3bn project to build a terminal for receiving liquefied natural gas (LNG) in Fujairah on the east coast of the UAE, according to several sources familiar with the scheme.

Tenders for the two main engineering, procurement and construction (EPC) packages have been cancelled two years after companies submitted commercial bids.

The packages were tendered in July 2014 and commercial bids for the main package were submitted in February 2015 by South Korea’s Samsung C&T and Italian groups Saipem and Techint.

The main package covered the construction of a 9 million tonne-a-year (1.18 billion cubic-foot-a-day) regasification terminal and associated facilities, with the second package planned to build gas storage tanks.

The project was retendered in 2014, after Emirates LNG decided to change the scope of the facilities and scrapped plans to build a floating terminal as the first phase of the scheme.

Emirates LNG is jointly owned by Abu Dhabi government investment arms Mubadala Development Company and International Petroleum Investment Company (Ipic), which are currently undergoing a $125bn merger.

Spokespersons from Mubadala and Ipic were unavailable for comment.

MEED revealed earlier this month that EPC tenders for another major Ipic-backed project in Fujairah – the proposed 200,000 barrel-a-day (b/d) greenfield refinery – had also been cancelled.

Fujairah has seen major oil infrastructure investment over the past decade due to its strategic location on the UAE’s east coast on the Gulf of Oman.

Projects in the emirate allow the UAE to import and export crude, oil products and gas without tankers having to pass through the Strait of Hormuz bottleneck, through which the vast majority of oil and gas shipments from the GCC countries, Iraq and Iran pass.

The Fujairah gas terminal was being planned to enable the UAE to meet domestic gas requirements for the electricity sector. However, last year, Abu Dhabi National Oil Company (Adnoc) installed a smaller floating storage and regasification unit (FSRU) at Ruwais in the west of the Abu Dhabi emirate.

The FSRU will add a capacity of 500 million cubic feet a day (cf/d) to the network of Abu Dhabi Gas Industries (Gasco) – the equivalent of about 7.5 per cent of the UAE’s domestic gas consumption.

The country became a net importer of gas in 2007 coinciding with the start-up of the Dolphin Energy pipeline from Qatar. In 2015, the UAE produced 5.7 million cf/d of gas and consumed 6.7 million cf/d, according to statistics from the UK’s BP.

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