$73b worth of natural gas contracts in GCC
As much as $73 billion worth of natural gas development projects are currently in the tendering or EPC (engineering, procurement and construction) phases across the Gulf Cooperation Council (GCC) states, Mohammad A. Sahoo Al Suwaidi, the Director of Gas Directorate in Abu Dhabi National Oil Company (Adnoc), said in the capital yesterday.
Addressing an industry conference, Al Suwaidi said, of this, $25 billion worth of gas projects are in Abu Dhabi alone, the main project here being the Bab sour gas development project where Anglo-Dutch exploration and production company, Shell, is committed to delivering gas by 2020.
“Domestic gas demand is growing 15 per cent annually,” Al Suwaidi said and Adnoc is now exploring partnership opportunities for developing non-conventional gas resources. Towards this end, the gas directorate was established to enhance the focus on gas, he added.
Recently, Shell said it had won a 30-year deal to develop Adnoc’s Bab sour gas field, a project estimated to be worth $10 billion. Adnoc will own 60 per cent of the Bab joint venture while Shell will own the remaining 40 per cent.
Al Suwaidi said Adnoc’s criteria in selecting a strategic foreign partner included the foreign partner’s commitment to work on a long-term basis with the Adnoc Group, technology transfer and development of local workforce and providing exceptional services at all stages of the oil and gas field development.
Abu Dhabi has onshore concessions expiring in 2014 while offshore concessions expire in 2018.
The Abu Dhabi government will evaluate companies on their technical ability when a decision is finally taken before January 2014 on foreign partnerships for onshore concessions expiring that year, a well-placed oil industry source told Gulf News, previously. Political and financial considerations will also play a role, the source added.
The decision on foreign partners for offshore concessions will likely be taken before their expiry in 2018, said the source, adding the indications are the onshore concessions will be offered for a shorter duration, not 65 years as is the case with some existing contracts.
Al Suwaidi also said the UAE’s current oil production stands at 2.77 million barrels per day while its natural gas output is 5.3 million cubic feet per day.
Separately, Robin Mills, Head of Consulting at Dubai-based Manaar Energy told industry delegates that the Middle East & North Africa (Mena) region’s gas export growth is “virtually all driven by Qatar and Algeria”.
“Neither will grow much after 2015. Algerian exports are already declining,” said Mills, adding Oman and Egypt’s gas exports were also on the decline at a time when new importers of the fuel were appearing on the scene.