x Abu Dhabi, UAETuesday 25 July 2017

Mubadala targets gas export hubs overseas

Mubadala Petroleum has been tasked by the government to look at gas-export facilities abroad to complement an import terminal under construction in Fujairah.

Mubadala Petroleum is the majority shareholder in the Dolphin project that transfers gas from Qatar's North Field to Taweelah in Abu Dhabi. Courtesy Total
Mubadala Petroleum is the majority shareholder in the Dolphin project that transfers gas from Qatar's North Field to Taweelah in Abu Dhabi. Courtesy Total

Mubadala Petroleum has been tasked by the Government to look at gas-export facilities abroad to complement an import terminal under construction in Fujairah.

Concerned with establishing a stable supply of natural gas to cater to growing demand and industrial expansion, Abu Dhabi's Government would like to see the integration of liquefied natural gas (LNG) import and export operations.

Mubadala Petroleum is building a gas portfolio in Africa, the Caspian and Asia. It is also involved in Abu Dhabi's two gas-import projects - the Dolphin pipeline and the Emirates LNG floating import terminal that is under way in Fujairah.

"Other nations who are importing LNG do have a portfolio of equities in upstream LNG projects, partly as a security of supply for the future," said Steven Peacock, the chief operating officer at Mubadala Petroleum. "We've been asked to do the same on behalf of Abu Dhabi. We are actively looking at those propositions around [our] geography, which is Africa, the Middle East, the Caspian and South East Asia."

LNG is gas that is liquefied in a cooling process at specialised terminals, allowing it to be shipped in tankers. Upon arrival, the liquid is regasified at terminals such as the one being constructed by Emirates LNG, a joint venture between Mubadala and Abu Dhabi's International Petroleum Investment Company (Ipic).

Gas delivered from sources abroad that are owned by the Abu Dhabi investor would come at a significant discount to the international LNG market price. Cheap gas is one of the prime advantages heavy industry in the Gulf holds over competitors in other parts of the world. Abu Dhabi is keen to grow its industrial base to diversify the economy from hydrocarbons.

Mubadala Petroleum has bought into one of the world's most promising gas regions - East Africa - with a stake in an offshore block in Tanzanian waters. The first exploration well will be drilled either at the end of this year or the beginning of next.

"That's a long way off in terms of bringing gas … to the UAE, but it is part of long-term positioning within the gas chain for Mubadala," said Mr Peacock.

Partex, a Portuguese company that works together with the Abu Dhabi company at an oilfield in Oman, said recently that it is in initial discussions with Mubadala about a joint LNG project in East Africa.

Mubadala Petroleum is the majority shareholder in the Dolphin project that transfers gas from Qatar's abundant North Field to Taweelah in Abu Dhabi.

The pipeline last year imported an average 2.3bn cubic feet per day (bcf), said Mr Peacock, slightly above the contracted amount, and further increases are possible.

The pipeline can transport 3.2 bcf a day, and Dolphin is upgrading its gas compressor facilities to be able to bring the pipeline to full capacity.

"It puts us in great shape for not only taking full advantage of existing agreements with Qatar, but also potentially in anticipation of future gas," said Mr Peacock.

Once the Emirates LNG terminal is completed by 2016, the UAE will have the capacity to import 4.3 bcf a day, if Dubai's imports are included, he added.

 

fneuhof@thenational.ae