Abu Dhabi is on track to develop new sources of natural gas that will ease a looming shortage, says the head of the company in charge of delivering the additional supply.
Sharp increases in the demand for electricity, which is produced in gas-fired power plants, and the growing gas requirements of an expanding petrochemical industry, have long rendered domestic natural gas production inadequate.
"Demand in Abu Dhabi and the UAE is really growing, and that's driven by strategic requirements," said Saif Al Ghafli, the chief executive of Abu Dhabi Gas Development, known as Al Hosn Gas. "You're talking about domestic industry and commercial gas requirements. We have ambitious plans to grow in these sectors."
The shortfall has prompted Abu Dhabi, home to the world's fifth-largest natural gas reserves, to import gas from neighbouring Qatar. A steep trajectory in forecast demand has led the emirate to move forward with developing its own reserves, which largely consist of sour - or sulphur-rich - gas.
Early last year, the Abu Dhabi National Oil Company signed a US$10 billion (Dh36.73bn) joint-venture agreement with the US oil and gas major Occidental to form Al Hosn Gas and develop the Shah sour-gas field near Habshan.
The project is on schedule for completion late in 2014, said Mr Al Ghafli. The immense Shah field holds an estimated 200 trillion cubic feet of gas, and production is expected to total 1 billion cu ft a day. The removal of sulphur and other impurities leaves about half that amount as usable gas.
"Shah will contribute to meet gas demand in Abu Dhabi. It will produce more than half a billion cubic feet a day, and that is a considerable amount to boost the supply side," said Mr Al Ghafli.
The project would also make Abu Dhabi the world's largest exporter of sulphur by 2015.
To enable exports, the sulphur will be granulated and hauled from Shah to the port of Ruwais via railroad. The 264-kilometre stretch will be the first phase of a planned 1,200km rail network that is to run through the Emirates and connect the UAE with Saudi Arabia and Oman.
Mubadala Development and International Petroleum Investment Company last month announced a liquefied natural gas import terminal in Fujairah, which, like Shah, is intended to become operational in 2014. Mubadala is a strategic investment company owned by the Abu Dhabi Government.
