Abu Dhabi and Dubai to develop new gas reservoir in Jebel Ali area

Announcement on Monday of find, estimated to hold 80 trillion cubic feet of gas, which is expected to boost country's drive for self-sufficiency

A new source of energy discovered in the UAE on 5,000 square kilometres of land on the border between Dubai and Abu Dhabi will support the country's aim to be totally self-sufficient in the generation of electricity and also provide additional power capacity to boost broader economic diversification efforts, it was announced on Monday.

Exploration and development at an 80 trillion cubic feet gas reservoir in the Jebel Ali area will be carried out by state-owned Abu Dhabi National Oil Company and the Dubai Supply Authority.

The reservoir has been discovered to contain what is referred to as "shallow gas", as it contains high-quality organic gas at relatively shallow depths from the Earth’s surface.

It is potentially the biggest gas find globally in the past 15 years, analysts said.

The signing of a joint venture agreement on Monday was witnessed by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, and Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.

"Together with my brother @HHShkMohd we witnessed the announcement of “Jebel Ali Project” gas reservoir that ADNOC will develop in collaboration with DUSUP... a new source of energy supplies to support national economy and sustainable growth plans in UAE," Sheikh Mohamed bin Zayed said following the signing.

The agreement was signed by Sheikh Ahmed bin Saeed, DUSUP's director general and Dr Sultan Al Jaber, Minister of State and Adnoc Group chief executive.

The gas produced from the reservoir will be supplied to Dubai.

Sheikh Ahmed said this is "an important step forward in further enhancing co-operation and tapping synergies to maximise the UAE’s resources, as part of our leadership’s vision for the next 50-year phase of development".

“We look forward to working closely with Adnoc to further explore gas resources in the area between Abu Dhabi and Dubai as part of diversifying our energy resources," Sheikh Ahmed said. "This collaboration will contribute to raising our long-term energy security, which is crucial to realising our aspirations in a new economic era of growth to be a leader in shaping the future of the region and the world, as well as enhancing the happiness and welfare of our people."

The UAE accounts for about 4 per cent of global oil production, with much of the output from fields owned and managed by Adnoc. Last November, Adnoc announced the discovery of additional reserves of 7 billion "stock tank" barrels of oil, 58 trillion cubic feet of conventional gas and 160 trillion cubic feet of unconventional gas. This pushed the UAE up the rankings to sixth place in terms of oil and gas reserves, according to US Energy Information Administration data.

The latest discovery at Jebel Ali will boost the Emirates' position globally in terms of gas reserves.

Around 10 exploration and appraisal wells were drilled by Adnoc, in its first exploration in Dubai in the area between between Saih As Sidirah and Jebel Ali.

The Jebel Ali gas project is part of Adnoc's wider efforts to step up the exploration and development of the nation’s oil and gas resources, Dr Al Jaber said.

The UAE, which imports gas via the Dolphin Pipeline to meet its electricity requirements, has been looking for new gas finds to become self-sufficient in a key resource for the generation of electricity.

The country also eventually aims to become an exporter of gas.

The northern emirate of Sharjah announced last week it had discovered gas and condensate, with flow rates of 50 million cubic feet per day.

On Monday, Abu Dhabi Power Corporation submitted an offer to transfer most of its assets to the Abu Dhabi National Energy Company, or Taqa, in a deal that will create a new regional utilities champion.