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Mon 25 Jun 2007 12:25 AM

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UAE short of gas in summer heat

Gas supply strained as residents crank up air conditioning in summer temperatures.

As summer temperatures rise, power stations are devouring gas supplies in the United Arab Emirates and leaving industry in some areas short.

Residents cranking up air conditioning units are increasing the call on gas-fired power plants and straining supply.

"Power plant gas demand can be several times higher in the summer than in the winter," said one senior energy industry executive based in the UAE. "The country is short of gas."

The seasonal change is exacerbating an already tight supply not just in the UAE but across the Middle East, where economic expansion has led to rapidly rising demand for natural gas for electricity, smelters and petrochemicals.

In Ras al-Khaimah, an emirate in the north of the UAE, gas supplies available for industrial use have dwindled as the country's power generation takes priority.

Government-owned Ras al-Khaimah Gas Company (Rakgas) has an interruptible contract with Dolphin Energy to import around 40 million cubic feet per day
(cfd) of gas from Oman.

But Omani imports into Ras al-Khaimah have fallen to just 3 million cfd as the UAE's Federal Electricity and Water Authority (FEWA) takes the Omani gas for power generation.

"We are going through a tough summer for gas, just as we did last year," Ras al-Khaimah Gas Company (Rakgas) Chief Operating Officer Ruurd Abma told Reuters last week.

Industrial users such as cement producers in Ras al-Khaimah and the emirate
of Fujairah are turning to coal as gas runs short.

In the largest emirate and the capital of the UAE, Abu Dhabi, gas used for reinjection in oilfields has been diverted to power plants.

The United Arab Emirates holds the world's fifth largest gas reserves but has failed to exploit them quickly enough to meet spiralling demand.

Relief should come when Dolphin Energy begins importing gas into the UAE from Qatar. Dolphin is due to start up its Qatari gas processing plant before the end of the month, industry sources said last week. Dolphin aims to import 2 billion cubic feet per day by the end of the year.

Dolphin supplies will boost gas available for domestic sales by nearly 50 % from last year's levels. Abu Dhabi is also evaluating bids for a tender to develop the country's massive reserves of sour gas. The $10-billion project is expected to boost domestic supplies by at least a billion cubic feet per day (cfd).


Rakgas expects its supply to improve next year as it is due to start importing 80 million cfd of gas from the offshore fields of neighbouring emirate Umm al-Quwain from January 1, 2008.

Sinochem subsidiary Atlantis will develop the offshore fields and is laying a 75 km pipeline into Ras al-Khaimah to deliver the gas.

Rakgas is also expanding its gas processing plant to process 150 million cfd, up from current capacity of 60 million cfd, Abma said.

Rakgas also has a contract to take delivery of around 100 million cfd from Dana Gas in the neighbouring emirate of Sharjah.

That deal is for a share of gas to be distributed by Dana under an import contract with Crescent Petroleum from an offshore Iranian oilfield.

But a year after the flow should have started, Iran is still building the gas platform. FEWA and Sharjah were also suffering less gas supply than anticipated due to the delay.

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