FACTS: Abu Dhabi needs gas for domestic market

Sam Fletcher
OGJ Senior Writer

HOUSTON, Oct. 1 -- Abu Dhabi currently imports 740 MMscfd of natural gas from Qatar via the Dolphin Pipeline and likely would buy more if the Qatari gas moratorium were lifted, according to FACTS Global Energy (FGE).

“The Dolphin Pipeline has extra capacity of 1.2 bscfd,” FGE said in a recent report. “If the Qatari gas moratorium is lifted, the UAE would be an easy source of incremental exports if the price is right. Given that Abu Dhabi is developing high-cost domestic gas and considering using oil for power generation, there is likely an increasing willingness to pay higher gas prices.”

In 2005 Qatar—third-largest gas producer in the world behind Russia and Iran—placed a moratorium on additional gas development projects at its massive offshore North field, pending results of a study of the field’s reservoirs that is not expected to be completed until after this year. That means that no new projects are likely to be signed before 2010, said FGE.

Meanwhile, Abu Dhabi is the largest gas producer in the UAE with production of 4 bscfd of gas for sale.

Abu Dhabi has several new projects pending that could produce large amounts of gas, condensate, or other gas liquids in 2010-15. However, some of that gas will be reinjected into the Emirate’s oil fields. Some 1.4 bscfd of gas currently is reinjected into Abu Dhabi’s oil fields to maintain oil production levels.

Hungry gas market
Abu Dhabi’s domestic market currently consumes 2.3 bscfd of gas, with electric power production representing almost 60% of the country’s total gas consumption and the rest going to industry. Gas represents almost 99.8% of the fuel mix in electric power generation, which increased 13% in 2008. Gas demand for power generation is expected to increase at an average growth rate of 8-9%/year during 2008-20. Demand also is increasing rapidly as a result of the expanding local, petrochemical, and industrial projects.

However, large gas reinjection requirements to maintain Abu Dhabi’s oil production are expected to limit the amount of gas available for the domestic market. As a result, national leaders are considering increased use of alternatives for generating power, including construction of the country’s first oil-fired electric power stations.

The Abu Dhabi Water & Electricity Authority is talking with major steam turbine manufacturers that could supply equipment for oil-fired plants. It may result in the planned Taweelah C independent water and power project (IWPP) becoming the first to run exclusively on liquid fuel, FGE reported. The planned Fujairah 3 IWPP could be the Emirate's next steam turbine power plant, it said.

Pending projects
Abu Dhabi’s Onshore Gas Development III (OGD-III) will construct a gas processing plant in the Habshan Zone of Bab field with the capacity to process 1.3 bscfd of raw gas and produce 1.2 bscfd of dry gas, 4.3 million tons/year (tpy) of NGLs, and 130,000 b/d of condensates. The gas will come from the Thamama F reservoir and, after liquids separation, will be reinjected into the oil reservoir. The engineering, procurement, and construction contract was awarded to Bechtel Corp. in December 2004. The project is slated to be completed at yearend and start commercial operation early 2010.

The Asab Gas Development II (AGD-II) calls for installation of two gas treatment and NGL recovery units with a total capacity of 743 MMscfd. It is designed to recover 2.3 million tpy of NGL. Residual gas will be reinjected back into the reservoir for pressure maintenance purposes. The EPC contract was awarded to Bechtel in July 2005 and operations are scheduled to start by the end of this year.

In addition, the third NGL extraction train at Ruwais is under construction to treat NGLs from the OGD-III and AGD-II gas projects. Ruwais is expected to extract 2.3 million tpy of ethane, 4.4 million tpy of LPG, and 2.1 million tpy of naphtha. The project is expected to be completed in 2010 and will provide feedstock for the petrochemical expansions (Borouge II) in Abu Dhabi.

Borouge’s current production capacity is 600,000 tpy of polyethylene. With the Borouge II expansion, the complex capacity will increase to 2.1 million tpy in mid-2010. Borouge II includes 1.5 million tpy ethane cracker. In June, Borouge awarded a $1.1 billion contract to the Linde Group for construction of a 1.5 million tpy ethane cracker (Borouge III). The expansion also includes construction of polypropylene and polyethylene units, a low density polyethylene unit, and a butane unit, as well as related offsite utilities and marine facilities. The contract will be executed on a lump sum turnkey basis and will be carried out by the Greek Consolidated Contractors Co. (CCC).

Borouge III is expected to be on stream by yearend 2013, using feedstock from expansions of the Abu Dhabi National Oil Co. (ADNOC) refinery and gas processing expansions at Ruwais (Habshan 5). FGE said completion of the new expansion will give Borouge the world’s largest ethane cracker complex.

The Integrated Gas Development (IGD) project is designed to produce 2 bscfd of high-pressure gas from the offshore Umm Shaif and Khuff reservoirs. It is expected that 1 bscfd of gas will reinjected into the Umm Shaif oil field and the remaining 1 bscfd will be treated in the Habshan gas processing plant (Habshan 5) for the domestic market. Habshan 5 is expected to produce 900 MMscfd of sales gas for industrial projects, as well as fulfill power generation requirements in Abu Dhabi and the northern Emirates. The project will also produce 4.4 million tpy of NGLs. The NGLs will be treated in the fourth Ruwais NGL extraction unit. The IGD project is expected to be completed in late 2013.

In July, Abu Dhabi’s Gasco, a subsidiary of ADNOC, awarded lump sum EPC contracts to different EPC contractors:

• Construction of the gas processing plant at Habshan (Habshan 5) to a joint venture of the Japanese JGC Corp. and Italian Maire Tecnimont SPA.

• Contraction of utilities and offsite work to South Korean Hyundai Engineering & Construction Co. Ltd.

• Construction of Ruwais’ fourth NGL train to a joint venture of Petrofac Ltd. and South Korean GS Engineering & Construction Corp.

• Construction of storage tanks to Chicago Bridge & Iron Co. NV.

The OGD-III, AGD II, and IGD projects are expected to increase gas reinjection during 2009-20 by an extra 3 bscfd of gas, FGE reported.

Shah gas development
Development of ultra-sour gas reserves in the Shah gas field is the most expensive gas project in the UAE and is expected to produce only 500-600 MMscfd of gas for new industries, power generation, or reinjection into the oil fields, said FGE. ADNOC selected ConocoPhillips to develop the field. That involves drilling 20 wells plus construction of necessary infrastructure, with gas scheduled to start flowing by first-quarter 2015.

Development cost is estimated as high as $10 billion, making it the country’s largest and most expensive nonassociated gas project. Through development of the Shah’s gas reserves, roughly 1 bscfd of raw gas, 1.6 million tpy of NGL, 30-40,000 b/d of condensate, and 3.4 million tpy of sulfur will be produced. After gas treatment, 500-600 MMscfd of dry gas could be available for domestic market or reinjection purposes.

ADNOC wants to proceed with development of the Hail and the Bab sour gas fields. The Hail gas field is expected to add an extra 400-600 MMscfd of gas, while Bab would produce 1.3 bscfd of gas. However, Abu Dhabi has not yet awarded EPC contracts to develop these fields, and these projects are unlikely to come on stream before 2015-16, said FGE.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Inhofe, Lankford say new BIA rules threaten Osage oil operations

07/10/2015 New US Bureau of Indian Affairs regulations that increase production expenses on tribal lands could put the Osage Nation out of business, Oklahoma’...

House panel’s crude export ban hearing weighs urgency against caution

07/10/2015 A US House Energy and Commerce subcommittee hearing on legislation to repeal the ban on exporting US-produced crude oil quickly broke along party l...

Chevron Phillips Chemical makes executive appointments

07/10/2015

Chevron Phillips Chemical Co. LLC has made several executive appointments, all effective Aug. 1.

Twelve workers killed in Nigeria pipeline explosion

07/10/2015 Eni SPA reported that an explosion occurred July 9 at the repair site for the Tebidaba-Clough Creek oil pipeline in Nigeria’s onshore Niger Delta.

Gov. Tomblin forms West Virginia oil, gas safety commission

07/10/2015 West Virginia Gov. Earl Ray Tomblin (D) established the oil and gas safety commission he announced in his 2015 State of the State address. The grou...

MARKET WATCH: NYMEX, Brent crude oil prices rebound more than $1/bbl

07/10/2015 Prices for US light, sweet crude oil and Brent crude each rebounded by more than $1/bbl on their respective markets July 9, and analysts attributed...

Transco seeks FERC approval for New York Bay Expansion project

07/09/2015 Transcontinental Gas Pipe Line Co. LLC (Transco), a wholly owned subsidiary of Williams Partners LP, has filed an application with the US Federal E...

House Oversight panel subpoenas Kerry for Keystone XL documents

07/09/2015 The US House Oversight and Government Reform Committee issued a subpoena to US Sec. of State John F. Kerry for reports, recommendations, letters, a...

MARKET WATCH: NYMEX crude oil prices drop for fifth consecutive trading session

07/09/2015 US light, sweet crude oil prices settled slightly lower on the New York market July 8 for the fifth consecutive trading session, and analysts attri...
White Papers

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected