New LNG import terminal is a possibility, energy minister says

The inaugural State of Energy report last year underlined the dominance of natural gas in the UAE for the foreseeable future.

A gas tanker is filled at Ras Laffan near Doha. The UAE imports about 2 billion cubic feet per day of gas from Qatar through the Dolphin pipeline. Tim Brakemeier / picture-alliance / dpa / AP Images

The UAE may consider another large new gas importing facility to meet the fast-growing energy needs of the country, the energy minister Suhail Al Mazrouei said yesterday.

The minister was setting out broad goals for the energy mix over the coming decades as he announced the publication of the second annual State of Energy report.

The report will provide a more detailed breakdown energy targets when it is published in October.

Mr Al Mazrouei reiterated the target was to generate 24 per cent of energy needs from clean energy sources by 2021, but said that “given the numbers we have seen it is going to be more than that”.

He said that Dubai in particular had been making rapid strides in renewable energy technology.

“We have seen in Dubai the lowest-ever cost of solar photovoltaic generation in the world, and it is today becoming a benchmark and driving hope to many countries around the world that this form of energy that used to be subsidised can compete on its own, and provide power and electricity to many parts of the world that didn’t previously have electricity,” the minister said.

He noted, however, that natural gas remained crucial to the country's future. The inaugural State of Energy report last year underlined the dominance of natural gas for the foreseeable future.

The UAE generates 90 per cent of its domestic power needs from natural gas and sits on reserves of about 6 billion cubic metres – the sixth-largest reserves in the world, according to the US Energy Information Administration. However, demand for power has been growing at least 6 per cent a year, requiring the import natural gas from Qatar and other sources.

The UAE imports about 2 billion cubic feet per day of gas from Qatar through the Dolphin pipeline, the largest cross-border gas project in the region.

Also imports about 3 million cubic tonnes of liquefied natural gas a year through the LNG terminal in Dubai.

Mubadala Petroleum and International Petroleum Investment Company – in a joint venture called Emirates LNG – plan to build an LNG intake facility in Fujairah with capacity to bring in 9 million tonnes a year. Although there have been mixed signals about whether that project will go ahead on time, the goal is still that it be built by 2018.

The minister made clear that the growth in the share of power generated by clean energy sources (primarily nuclear) would be meeting additional demand and not replacing natural gas, the need for which would continue to grow strongly.

“We are not shifting away from gas towards more renewable energy – there is growth of about 6 per cent a year, sometimes more, on energy demand,” Mr Al Mazrouei said.

“The UAE is today a net importer of gas, so in future we require huge amounts of gas, primarily from imports. Despite the fact that we are developing some of the most challenging reservoirs in the world – sour gas [projects at Al Hosn and Bab] – we are still going to have a huge need for imports.”

He said that the tender for the Fujairah plant had gone out “and once that project is approved and functioning we will continue to look at supply and demand balance … we will definitely require additional LNG to balance the market”.

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