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Thu 30 Nov 2006 04:00 AM

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Abu Dhabi natural gas production keeps surging

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The gas business is set to take off in Abu Dhabi. According to officials in the Emirate, natural gas production will rise to 6 million cubic feet per day (million cfd) by 2008, from 4.5 million cfd now, a jump of 33%. Also over the next two years or so, liquified petroleum gas (LPG) output will surge to 13 million tonnes per year (million tpy), up from 7 million tpy, an increase of 86%.

Yousuf Omair Bin Yousuf, secretary general of the Supreme Council for Oil and CEO of Abu Dhabi National Oil Company (Adnoc) says that with plentiful natural gas reserves on hand (currently estimated at around 200 trillion cubic feet) the key driver for this increase in production will be rocketing domestic demand.

He estimates that domestic demand for gas is growing at around 10% per annum, compared with an average world rate of around 6-7%; world oil demand, meanwhile, is growing at a fairly pedestrian 2% per annum. On these current trends Abu Dhabi is set to become one of the world’s largest gas producers. The Emirate is already rated number five in the world by size of gas reserves. The gas has always been there – so why should there be such a sharp acceleration in use over the next few years? The answer lies in a change of approach.

Much of Abu Dhabi’s reserves are sour gas, with a high content of hydrogen sulphide, which were until recently considered not commercially viable. High hydrocarbons prices over the last few years, as well as growing demand for gas, and a shift in attitudes to favour what is seen as an environmentally cleaner fuel, have changed the picture.

New fields under development both onshore and offshore will provide additional gas, and the current thinking is that it will be economically viable to strip it for LPG and other products, and then inject the remainder to increase reservoir pressure at the country’s oil fields.

Shell and Exxon Mobil are also involved in exploration for sour gas at Shah and Bu Hasa, and the state-owned Adnoc is expected to invite tenders for production next year.

Other companies that have expressed interest include BP, Chevron, Total, Eni, Occidental, Lukoil, Sinopec, and India’s ONGC.

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