아랍에미레이트 후자이라에 LNG 수입 터미날 건설

[Sea and Dream]

UAE set to build LNG import terminal

·         Friday 23 March 2012, 13:41

·         by Hal Brown

Fujairah: building a terminal on the UAE’s east coast means gas imports from around the world will not have to go via the Strait of Hormuz.

Growing demand for airconditioning in summer boosts liquefied natural gas requirements

THE UNITED Arab Emirates has caused some commentators in the liquefied natural gas industry to scratch their heads in confusion after the Middle Eastern country announced plans to open a new LNG import terminal on its east coast.

Confusion stemmed from the fact that the UAE is a major natural gas producer with the seventh-largest reserves in the world, prompting the question of why it needs to import gas on ships.

“It seems very strange to have an import terminal so close to one of the world’s largest gas fields,” Oslo-based ABG Sundal Collier LNG analyst Marius Magelie told Lloyd’s List today.

However, there is a valid explanation as to why the UAE needs to import LNG, he said.

As the country develops, demand for air conditioning has risen. This has led to the requirement for extra volumes of gas to generate the electricity for the air conditioning units, particularly during the peak season in the summer months. Dubai on the west coast of the UAE already imports LNG for this purpose. The new import terminal will be a floating regasification unit in Fujairah on the east coast and is scheduled for completion by 2015.

The advantage of having the new terminal in Fujairah is its position on the east coast. It means the UAE will be able to import gas from around the world without shipments having to go through the Strait of Hormuz, where tensions have mounted after Iran threatened to close the passageway in response to western sanctions on its oil. The UAE has to take LNG from sources around the world after it failed to agree on payment terms with its neighbour and world’s largest gas producer Qatar.

Building another import terminal in the UAE also gives the country an advantage when it comes to buying gas to meet peak season air conditioning demand.

“The access to the world market for gas gives the UAE options and strengthens their bargaining power in the negotiation of prices because they can say they can get the gas elsewhere,” said Mr Magelie.

Imports into Fujairah will be positive for LNG shipping as a new trade lane will develop, which enhances the industry’s growing flexibility.

LNG shipping has become more flexible over the last six years as differences in gas prices encouraged traders to buy cargoes cheaply in one market and sell them for the highest price in another market. This was partly why more more Atlantic basin LNG was shipped to Asia over the last year. Japan’s need for more volumes after the shutdown of most of its nuclear capacity was also a major factor driving Atlantic to Asia trades.

The arrival of new exporters, such as the US, should increase shipping flexibility as more cargoes come onto the market.

The UAE project, called Emirates LNG, is being run jointly by Mubadala Oil & Gas and International Petroleum Investment Company. The companies said in a statement that the project aims to secure “additional gas supplies to meet energy demand from the UAE’s growing economy”. The project is supported by a number of expert advisors, the companies added.