Problems worsened by shortage with supplier Abu Dhabi.
City saps emirate's gas supply
Gas demand in the city of Sharjah increased sharply last year, contributing to a shortage of the fuel across the emirate. The volume of gas pumped by supply stations to locations connected to the city's distribution network rose by 21 per cent last year to 32.3 million cubic metres from 26.7 million cu metres in 2008, the Sharjah Electricity and Water Authority (SEWA) reported.
"Gas connection points saw a substantial increase to 156,859 in 2009 from 133,227 in 2008," said Tareq Demas, the director of natural gas for the government-owned utility. Sharjah is the first community in the UAE to have installed a citywide network of municipal pipelines for distributing natural gas to customers. As a result, SEWA is the only UAE utility to distribute and market gas, as well as power and water.
"The Sharjah piped natural gas project is progressing as scheduled and the network has reached the Emirates Industrial Area in Sajaa," Mr Demas said. "The gas network in the Sharjah city has stretched 1,600km. Connections are being laid down for the newly developed residential, commercial and industrial areas." SEWA said it was supervising work by 14 companies contracted to commission gas connections for domestic consumers.
But Sharjah's municipal gas network is being rolled out during a national gas shortage. Last month, a number of engineers and experts, including some involved with SEWA, blamed a series of power cuts Sharjah experienced in May and last summer on insufficient gas supplies to local power stations. Sharjah was also experiencing financial problems related to buying diesel as a substitute fuel for electricity generation, as it cost three times as much as gas, they added.
SEWA has repeatedly declined to comment on the causes of the power cuts. "SEWA's gas pumping stations have large reserve capacities to satisfy expected demand for gas in the future," Mr Demas said. But it is far from clear how extra gas could be supplied to refill the utility's gas storage facilities if the stockpiles were drawn down. The emirate has limited gas reserves and production, and buys most of its supply from Abu Dhabi, along with some electricity.
In the medium term, Sharjah could buy extra electricity from the neighbouring emirate, but such an arrangement would take time as the Abu Dhabi Water and Electricity Authority requires advance notice to respond to projected increases in gas demand. Experts largely attribute Sharjah's gas shortage to SEWA's failure to plan for a large increase in local demand as the emirate's government encouraged rapid urban and industrial expansion.
In any case, Abu Dhabi is also short of gas for power generation. It is looking mainly to its nuclear programme for additional generating capacity, but its first reactor is unlikely to be in service before 2017. Another problem for Sharjah has been the failure of contracted gas imports from Iran to arrive. Deliveries of up to 6.2 million cu metres a year of gas were supposed to start four years ago through an undersea pipeline built by Crescent Petroleum, a private Sharjah oil and gas group.
The company is seeking a ruling from an international arbitration court on its gas supply contract with the state-owned National Iran Oil Company. Last month, the Government of Sharjah granted a new onshore oil and gas concession to a joint venture between Crescent and the Russian state-controlled oil company Rosneft. The companies recently started drilling their first exploration well to test a gas prospect near Al Madam in Sharjah.