Emirates LNG has leased a plot of land on the east coast of the United Arab Emirates (UAE) and will start building an LNG import terminal there later this year, the company said in a statement on Sunday.
The joint venture between Abu Dhabi’s Mubadala Petroleum and IPIC was set up in 2012 to import liquefied natural gas (LNG) into the port of Fujairah to help meet rapidly rising demand for gas in the UAE.
“The Emirates LNG facility will have the capacity to import nine million tons per annum of LNG to help fuel the growing energy demands of the UAE economy,” Emirates LNG Chief Executive Ahmed Matar Al Mazrouei said.
The UAE has exported LNG since the late 1970s but its own rapidly rising demand and slower production growth have made the OPEC member a net importer of gas over the last five years.
A population boom in a desert country where fresh water is scarce and temperatures often exceed 45 degrees Celsius in summer, has caused a surge in energy demand for air conditioning and to make sea water drinkable.
The land leased from the local government to build the terminal on is next to the Emirates SembCorp power and desalination plant at Qidfa, Emirates LNG said.
The company said the local government at Fujairah also planned to reclaim a portion of land from the sea where the terminal is to be built, with completion of the terminal expected within two years.
Rather than building a full-scale import terminal, Mubadala has said it is planning to use a floating storage and regasification unit to bring LNG into the UAE.
Dubai already imports LNG to ports in the Gulf, and the UAE gets a modest volume of Qatari gas by pipeline, which helps feed power and desalination plants at Fujairah.
Building an LNG import terminal outside the Strait of Hormuz reduces the risk that the UAE’s supplies could be affected by problems in the vital oil and gas shipping lane, which neighbouring Iran has threatened to block over the last year.