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Ruwais LNG will push UAE up the energy table

Adnoc Ruwais LNG Reuters/Christopher Pike
The Ruwais LNG terminal will help Abu Dhabi, through Adnoc, become the second-largest supplier of LNG in the Middle East
  • Abu Dhabi’s capacity will rise to 15 mtpa
  • Global demand for gas will increase
  • Adnoc gas quality to be improved

Abu Dhabi is planning to increase its presence in the liquefied natural gas market, helping it to diversify away from oil. Ruwais LNG, a new terminal located in Al Ruwais Industrial City, will increase the emirate’s capacity from 5.7 million tonnes per year (mpta) to 15 mpta. 

The project features two 4.8 mtpa LNG trains, which analysts said could be increased to four trains.

It will help Abu Dhabi, through the state-owned energy company Adnoc, become the second-largest supplier, after Qatar, of LNG in the Middle East.

“Adnoc is close to finalising the engineering procurement construction contracts for Ruwais LNG,” Siamak Adibi, Singapore-based principal consultant at Fact Global Energy, told AGBI. “I think they will start construction by June 2024, with the first cargo to load at the end of 2028 or early 2029.”

Adibi said that Adnoc Gas, a subsidiary of the Abu Dhabi state oil company, awarded contracts totalling more than $400 million for main equipment last year.

Justin Alexander, founder of Khalij Economics, said: “Most forecasters say that demand for gas and LNG will grow strongly over the next decade and beyond.” 

Wood Mackenzie, a data & analytics business based in Edinburgh, predicts that the Middle East will spend up to $120 billion by 2030 to boost its natural gas production.

Raad Alkadiri, non-resident fellow at the CSIS Energy Security and Climate Change Program, said Adnoc’s move fits with its aggressive business diversification plan.

“It is about securing multiple revenue streams rather than relying solely on oil, and committing early to hydrocarbons, leaving others to worry about falls in demand,” Alkadiri said. 

“The gamble is that there will be enough room for the cheapest players to secure long-term contracts.”

The UAE has the world’s ninth-largest natural gas reserves, at nearly six trillion cubic metres. It has been exporting LNG from the Das Island liquefaction and export terminal since 1977.

The facility has a capacity of 6 million mtpa and will be upgraded by about 0.8 mpta in 2028.

However, Adnoc has been suffering from gas quality issues at Das Island, according to the research company Facts Global Energy, which said: “The sulphur and ethane content for Das Island cargoes have limited the number of customers and markets for Abu Dhabi’s LNG supply.”

Adibi said the Ruwais project will help improve Adnoc’s position in the global energy market and expand its presence in Asia and the Atlantic basin.

According to Alexander, there is scope for more supply from the Middle East, as demand grows in South and East Asia.

Marc Howson, head of Asia Pacific and global LNG at Welligence Energy Analytics in Houston, Texas, said: “Buyers are looking to diversify their 2030 LNG supply sources by evaluating alternatives to Qatari and US Gulf Coast volumes, which account for around 50 percent of global LNG production.”

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