Adgas to start offshore gas project in July

The United Arab Emirates will start production from its offshore associated gas (OAG) project in July, a top energy official said on Monday.

The UAE, the world's third-largest oil exporter, is spending tens of billions of dollars to boost gas capacity to meet rapidly rising domestic demand.

The Gulf Arab state sits on the world's fifth-largest gas reserves but has been slow to develop them and relies on imports of 2 billion cubic feet per day (cfd) from Qatar to meet the shortfall between domestic supply and demand.

The OAG would bring 211 million cfd of gas produced at offshore oil wells to facilities onshore for processing.

"We are in commissioning," Hasan al-Marzooqi, deputy managing director of the Abu Dhabi Gas Liquefaction Company (Adgas) said in a presentation to an industry event. "We should be pushing gas to the mainland very soon.... July."

A 200 km gas pipeline would link offshore gas production with the onshore grid and should relieve congestion at the Das Island facility, which processes offshore gas.

Adgas is a unit of state energy giant the Abu Dhabi National Oil Company (ADNOC), and liquefies gas at Das Island for export as LNG. Most of the gas it chills goes to Tokyo.

Sister unit Abu Dhabi Gas Industries Limited (Gasco) processes gas onshore and is working with Adgas on the OAG project to pump offshore gas ashore.

The UAE was on track to start full operations from its multi-billion dollar integrated gas development (IGD) project in the first quarter of 2013, Marzooqi said.

The IGD would process 2 billion cfd of gas at a new plant under construction at Habshan. After processing, the plant would supply 900 million cfd of sales gas to the UAE's grid.

Around 1 billion cfd of raw gas would come from offshore facilities at the Umm Shaif field, while the rest would come from onshore facilities.

The UAE expects to increase gas capacity as it raises oil production capacity, as most of its gas is produced as a by-product of oil. 

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