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UAE strikes gas, twice
UAE
The UAE wants to become a net gas exporter.
THE United Arab Emirates has in a short space of time reported two major onshore gas dis- coveries, vindicating its expanded focus on exploration.
Sharjah National Oil Corp. (SNOC) and Ita- ly’s Eni announced a gas and condensate discov- ery at an onshore well in the Sharjah Emirate’s Area B. e discovery, named Mahani, comes within the rst year of the pair’s partnership, and marks the rst onshore gas nd in the Emirate since the early 1980s.
Mahani-1 was drilled to a total measured depth of 5,000 metres, and tested gas at ow rates of up to 1.42mn cubic metres per day, as well as condensate. e discovery’s size will be evaluated in “due course,” SNOC said, with additional drill- ing expected. However, Sheikh Ahmed bin Sul- tan al Qasimi said it would bring about a “major transformation” in Sharjah’s industrial and com- mercial sectors by providing energy resources and attracting top global companies.
Topping this news, the UAE’s Abu Dhabi National Oil Co. (ADNOC) revealed on Febru- ary 3 that a 2.27 trillion cubic metre (tcm) gas eld had been identi ed between Abu Dhabi and Dubai, following a 10-well drilling campaign. ADNOC has teamed up with the Dubai Supply Authority (DUSUP) to continue exploration and development at the shallow deposit, known as Jebel Ali.
e UAE has around 5.9 tcm in proven gas
and produces around 65bn cubic metres (bcm) per year. But this is not enough to satisfy demand, estimated at close to 77 bcm. e Gulf state cov- ers the shortfall with supplies from Qatar via the Dolphin pipeline.
Recently the UAE has invested heavily in exploration, however,in the hope of achieving gas self-su ciency and possibly become a net exporter. Last year it reported a growth in its oil and gas reserves, as well as new unconventional gas nds.
If authorities’ estimates prove correct, Jebel Ali would mark the biggest gas discovery in the world since Galkynysh in Turkmenistan in 2005.
“ e shallow nature of the nd will mean that development costs will be much lower than some of Abu Dhabi’s sour gas resources,” Liam Yates, analyst at Edinburgh-based Wood Mackenzie, saidinaresearchnote.“Adiscoveryofthisscale will be a clear priority for development, but the timing will be dependent on where it ts into the UAE’s gas market. Large volumes of gas are asso- ciated with oil production, which is on the rise.”
ADNOC has other gas projects in the pipeline it needs to focus on as well, including the Hail and Ghasha development. It will also have to honour its gas import commitments with Qatar.
“But longer term, [Jebel Ali] is likely to play a pivotal role in the UAE’s gas market and could lead to additional gas exports from the country,” Yates explained. ™
BP mulls sale of Algerian gas project
ALGERIA
Most of Algeria’s gas is exported via pipeline and LNG terminal.
BP is on the search for a buyer for a major gas project in Algeria, responsible for almost 10% of the country’s national output, sources told Reu- ters on February 6.
e UK major had been in talks to transfer its 45.9% stake in In Amenas gas plant to Rus- sia’s state oil giant Rosne , Reuters reported. But negotiations broke down because BP’s partner in the venture, Norway’s Equinor, did not want to work with Rosne . e Russian rm, which BP has a 19.75% stake in, has been under US sanc- tions since 2014.
Equinor also controls a 45.9% interest in the project, which in addition to the plant includes pipelines and four wet gas elds in the Sahara Desert. e remaining 8.2% is held by Algeria’s national oil company Sonatrach.
BP is hoping to fetch around $2bn from the sale, Reuters sources said. e UK major is in the midst of a major divestment programme, having
already shed $9.4bn of assets since the start of 2019. It aims to announce a further $5bn in deals by mid-2021.
As of press time, BP, Equinor, Rosneft and Sonatrach have not commented on the sales plan. But sources told Reuters that BP had in recent months got in touch with a number of interna- tional oil companies to test the market’s appetite.
The In Amenas project has a production capacity of 9bn cubic metres of gas, while total Algerian output averages around 92 bcm per year. e bulk of this gas is exported via pipeline and LNG terminal. In Amenas was the site of a deadly terrorist attack in January 2013 that led to 40 employees losing their lives. e security situation has since improved, as a result of an increased military presence.
BP is also partnered with Equinor and Sonatrach at a second, dry gas project in the Algerian Sahara, known as In Salah. ™
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w w w. N E W S B A S E . c o m Week 05 06•February•2020