EmiratesLNG will build and operate the Middle East’s first land based liquefied natural gas (LNG) import facility at Fujairah, having won government approval for the project, the company said on Monday.
The UAE has exported LNG since the late 1970s. But rapidly rising domestic demand and sluggish progress on raising its own production have made the OPEC member a net importer of gas over the last five years.
A population and industrial boom during the last decade have increased the UAE’s reliance on imported gas to meet power demand, especially in summer when air conditioning use surges.
EmiratesLNG, a joint venture between state-controlled International Petroleum Investment Company (IPIC) and Mubadala Petroleum, said it would push ahead with the project after Abu Dhabi Executive Council decided to approve the project.
“EmiratesLNG will seize this opportunity to establish itself as a key player in the Middle East within the global LNG market,” Ahmed Matar Al Mazrouei, CEO of EmiratesLNG said in a statement.
EmiratesLNG said the new terminal to be built at the busy oil port of Fujairah would be able to accommodate the largest LNG tankers, with most of the gas destined for the power sector.
It said the terminal would be able to supply the UAE with around 1.2 billion cubic feet (bcf) per day of gas, or 9 million tonnes of LNG per year.
The Front End Engineering Design (FEED) has been done by France’s Technip.
EmiratesLNG said it was working to ensure the timely completion of the project but gave no completion date or cost estimate. It said it was still deciding which company would be awarded the construction contract.
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 threatened to block last year.