UAE second largest Arab gas consumer
Gas demand in the UAE due to the increased consumption has grown by more than seven per cent since 2003 to peak at 620,000 barrels of oil equivalent per day (boe/d) in 2007 compared with 480,000 boe/d in 2003.
The figures by the Organisation of Arab Petroleum Exporting Countries (Oapec), which groups the UAE with nine other Arab oil producers, showed the UAE was second only to Saudi Arabia in gas consumption last year after overtaking Egypt over the past two years.
Saudi Arabia’s gas demand was estimated at 1.05 million boed, nearly 25 per cent of the total Arab gas consumption of around 4.09 million boe/d. Oapec attributed the surge in the country’s gas demand to high growth in its economy over the past few years, a rapid rise in the population, and expansion in gas use in power generation and in re-injection in oilfields.
It said the increase has prompted the UAE to turn to gas imports and to embark on a massive investment programme to boost the country’s gas production.
It referred to plans announced by the Abu Dhabi National Oil Company (Adnoc) to invest at least $7billion (Dh25.7bn) to expand gas output capacity by around 36 per cent by the end of 2009.
Its figures showed Adnoc pumped nearly 5.3 billion cubic feet per day of natural gas last year and is increasing output to 7.2 billion cubic feet per day. The report also cited Abu Dhabi’s plans to exploit its sour gas reserves.
Speaking at a recent energy conference in Abu Dhabi, a UAE official expected growth in gas demand in the country to sharply pick up to 13 per cent in few years. Khaled Al Awadi, gas operations manager at state-owned Emirates General Petroleum Corporation, said the UAE currently is suffering from a gas supply shortage, which is met through oil and natural gas liquids.
Awadi said his figures on domestic gas consumption cover only power generation and industry as they do not include gas re-injection to boost oilfield recovery and Abu Dhabi’s liquefied natural gas projects, which produced close to six million tonnes last year.
The UAE has the world’s fifth largest gas reserves after Russia, Iran, Qatar and Saudi Arabia, estimated at nearly 214 trillion cubic feet at the start of 2008.
But a large part of them are associated with oil, making their treatment a costly process and entailing the UAE to raise crude production and bust Opec quota system. The UAE has said it will boost oil capacity in line with future demand.
To meet a surge in domestic demand, the UAE has invested heavily in projects to expand gas production over the past 20 years. From around 25 billion cubic metres in 1995, natural gas output swelled to nearly 35bcm in 2000 and 47bcm in 2006. It is projected to have exceeded 50bcm in 2007 and swell above 60bcm in 2015, according to official figures.
Besides domestic production, the UAE is getting around two billion cubic feet per day of Qatari gas through Dolphin pipeline and there are plans to get more than 500 million cubic feet per day from Iran through Dana Gas pipeline.