In the upcoming few years, the government of Dubai will be faced with the challenge of sourcing additional volumes of natural gas to fuel its non-oil growth.
Dubai presently sources between 690 and 790 cubic feet per day (cfpd) of natural gas from Sharjah and its local onshore and offshore concessions, reported Gulf News. The onshore concessions of BP Amoco Sharjah Oil Co.’s Sajaa, Kahif and Moveyeid supply a combined 400 million cfpd of gas. A further 300 to 350 million cfpd is supplied from Margham field, while the Fateh field accounts for 40 million cfpd.
Dubai’s demand for gas is expected to rise from the current 800 million cfpd to 1.5 billion cfpd by 2005. Re-injection of natural gas into oil wells will account for 4.05 billion cubic meters (bcm), or 27 percent of aggregate gas needs, while 4.95 bcm will be required for power generation.
In order to acquire such additional volumes of natural gas, the Dubai Supply Authority (DSA) has recently opened negotiations with four potential suppliers – Total of France, which supplies from an offshore Iranian gas field, BSP Amoco Qatar Inc. for supplies from its North Field, Adnoc, and the Dolphin project.
By 2005, major projects in Dubai such as Emirates Lakes and Westside Marina, Dubai Internet City, Dubai airport’s third terminal and Dubai Investment Parks will all be fully operational and will require major sources of power. Supplies from Sharjah are likely to be limited since there have been no major recent discoveries or developments at existing concessions.
In June 1999, DSA signed a memorandum of understanding with UOG for between 200-700 million cfpd of Qatari gas from the Dolphin project. The agreement, which has yet to be finalized, would bridge the gap between Dubai’s future energy demand and supply.
In February 1998, Adnoc signed an agreement with DSA for supplies of 800 million cfpd. The Abu Dhabi Gas Co. (Atheer) is presently constructing a pipeline from Maqta via Taweelah to Jebel Ali, which will be completed within 10 months. It will initially supply 500 million cfpd of gas, augmenting to 800 million cfpd by 2003.
DSA is also holding negotiations regarding Total SA-sponsored Sirri field projects, which would bring in 100 million cfpd of gas. Fortunately for Dubai, it has several different options open to receive gas from a number of prospective suppliers, giving it the leverage to negotiate a contract with favorable terms. –(Albawaba-MEBG)
