Out-Law News | 12 Nov 2014 | 11:58 am | 2 min. read
Suhail bin Mohammed Faraj Faris Al Mazrouei said the Abu Dhabi National Oil Company (ADCO) has invested $70 billion to date in the development of new oil and gas fields.
Al Mazrouei told the Emirates News Agency (WAM): “We expect to develop new gas fields and launch new projects to import liquefied natural gas (LNG).”
Al Mazrouei said new projects would include awarding a contract for developing a new LNG regasification facility on the UAE’s east coast in Fujairah (Emirates LNG). The contract is expected to be awarded by the end of this year or early 2015, Al Mazrouei said.
On completion Emirates LNG, a joint venture between Mubadala Petroleum and International Petroleum Investment Company, will start importing LNG cargo from the international market. The joint venture said the facility will be capable of supplying 1.2 billion cubic feet per day of “clean, efficient natural gas, which will be used primarily for power generation”.
Al Mazrouei said the UAE’s LNG production is currently enough to meet around 50% of demand while the remainder of LNG required is imported.
Asked whether increased interest in the production of shale oil could pose a threat to the “conventional oil and gas industry”, and the industry in member states of the Organization of the Petroleum Exporting Countries (OPEC) in particular, Al Mazrouei said: “We don't see any potential threat from shale oil usage as producers, given the high production cost of this fuel in comparison with that of conventional oil. On the contrary, we think these new discoveries will help strike a balance in the supply-demand equation and in reaching a fair price in favour of producers.”
Shale gas imports also represent “one of our promising supply options”, Al Mazrouei said.
Figures published by Reuters earlier this year indicated that ADCO is responsible for more than half of the UAE's total oil production. The six oil fields ADCO is responsible for have been producing oil for more than 50 years. Abu Dhabi's largest oil fields returned to state control when a 75 year old concession agreement with a number of international energy companies came to an end last January. Reuters said a number of the partners are being invited to bid for a share under a new agreement.
According to the US Energy Information Administration (EIA) natural gas use in the UAE is rising. While the country is a member of the Gas Exporting Countries Forum (GECF), “domestic demand is likely to draw heavily on the UAE's potentially-exportable natural gas resources”, the EIA said. “The UAE is making notable progress in diversifying its economy through tourism, trade, and manufacturing. However, in the near term, oil, natural gas, and associated industries will continue to account for the majority of economic activity in the seven emirates.”