LNG

Baker Hughes, the US liquefied natural gas equipment-maker and energy services company, swung to an annual profit compared with a previous loss as quarterly income also rose along with revenues amid an operational overhaul and among the orders booked was one for LNG from the United Arab Emirates.

The Abu Dhabi National Oil Company (ADNOC) will need to invest more than $40 billion in order for the United Arab Emirates to attain natural gas self-sufficiency due to the complex nature of the country’s gas resources and as the UAE also expands LNG production.

The investment figure comes in a new report on ADNOC by the UK-based energy consultants Wood Mackenzie.

The report looks at the gas expansion plans, including sour and unconventional gas fields that were previously thought too complex technically and expensive to develop.

“The commitment to self-sufficiency is driving ADNOC to examine all options in its push for more gas,” said Alexandre Araman, the Principal Analyst of Middle East Upstream at Wood Mackenzie.

Growth strategy

“Its growth strategy, approved by the Supreme Petroleum Council, relies on the development of ultra-sour gas, unconventional and gas cap resources. Associated gas expansion is also expected to contribute as well as exploration and new discoveries,” the report said.

The report cites the Ghasha development as a critical piece of the self-sufficiency puzzle, with a target to produce 1 billion cubic feet a day of sales gas before 2030. 

The concession contains nine offshore fields in the Arabian Gulf.

“The high costs associated with an offshore ultra-sour gas development, the sulphur handling requirements and the typically low domestic gas prices result in challenging economics with cost estimates of at least $20Bln,” the report added.

The report cites the Shah Gas Development expansion as another key project and plans are underway to boost the total capacity to 1.85 bcf per day from the current level of 1.45 bcf per day.

“If this is approved, sales gas should increase from 0.74 bcf per day to 0.94 bcf per day,” said the report.

The report added that due to the ultra-sour nature of the gas at Shah, any development was always extremely challenging from both a technical and budget perspectives.

Other projects in the pipeline include large untapped unconventional gas resources at Ruwais Diyab as well as plans for developing gas caps and additional conventional gas resources, but the report states that technical issues and escalating costs could see the timelines stretched for many of the projects being planned.

Advancing

“ADNOC is moving swiftly to advance on all fronts via mega-development projects, ambitious production targets and IOC partnerships,” said Wood Mackenzie.

“But the complex and expensive nature of these resources has derailed progress with escalating costs and final investment decision delays,” it concluded.

Separately, ADNOC Gas is also development the Ruwais LNG project consisting of two liquefaction Trains of 4.8 million metric tonnes annum and total nameplate capacity of 9.6 MTPA.

The existing liquefaction plant on Das Island currently has export capacity of 6 MTPA.

Kent, the privately-owned international integrated energy services company headquartered in Dubai in the United Arab Emirates, has won a natural gas pipeline project contract to improve energy security for some of the smaller of the seven emirates that make up the UAE.

The Kent group, which is backed by private equity firm Bluewater, was named as the project management consultant (PMC) for the new pipeline in the northern UAE to supply RAKGAS.

RAKGAS is a state-owned energy business set up in 1984 in Ras Al Khaimah, transitioning from a gas company to a diverse energy provider.

Ras Al Khaimah is the largest city and capital of the emirate of Ras Al Khaimah.

It is the sixth-largest city in the UAE after Dubai, Abu Dhabi, Sharjah, Al Ain and Ajman.

Pipeline route

The pipeline will stretch from the Taweelah-Fujairah Gas Pipeline to Ras Al Khaimah with a connection to the Sajaa gas storage in the Sharjah emirate.   

The Taweelah-Fujairah link is an existing natural gas pipeline running for 244 kilometres (152 miles) in length from Taweelah in Abu Dhabi to Al Fujairah.

Kent will be responsible for coordinating efforts between RAKGAS and the front-end engineering and design (FEED) study contractor, ensuring that the project’s progression remains on target and aligned with its planned objectives.

“Collaborating with Kent on this project is a testament to our vision for energy supply in the region,” said RAKGAS Chief Executive Chris Wood.

“Their expertise and experience in the UAE will steer this project to success, ensuring we deliver on our commitments for energy security in Ras Al Khaimah,” Woods stated.

Partnership

Tush Doshi, Chief Operating Officer at Kent, said he was proud to partner with RAKGAS on this project.

“It will allow us to bring our world-class PMC delivery expertise to the Northern Emirates,” Doshi explained.

“We look forward to a long-lasting relationship with RAKGAS, as we ensure a continuous and seamless execution across leading energy projects in the region,” said the Kent COO.

Both Kent and RAKGAS added that they had adopted a “proactive approach” to addressing the region’s energy needs.

The Kent group is growing as a Middle East player. It gained some engineering traction in July 2021 when it completed the acquisition of the majority of the oil and gas division of Montreal, Canada-based engineers SNC-Lavalin.

Abu Dhabi National Oil Company (Adnoc) has awarded a contract valued at more than 1.47 billion United Arab Emirate dirhams ($400M) to US LNG equipment and technology-maker Baker Hughes for the supply of two all-electric compression systems for the UAE’s planned second LNG export plant to be located at Al Ruwais Industrial City.

The LNG trains will comprise energy efficient Baker Hughes technology, including compressors driven by 75 megawatt electric motors.

 “The Ruwais LNG plant will be the first LNG project in the Middle East and North Africa region to run on clean power, making it one of the lowest carbon intensity LNG facilities in the world,” said a statement.

Innovation

Fatema Al-Nuaimi, Executive Vice President of Adnoc’s Downstream Business, said that as the first clean electricity-powered LNG facility in the Middle East, the Ruwais LNG project reinforced Adnoc’s commitment to innovation.

“The project aligns with Adnoc’s objectives to grow our energy portfolio with lower-carbon solutions, reinforcing our position as a reliable global supplier of natural gas and contributing to enhancing global energy security,” added Al-Nuaimi.

The Ruwais LNG project consists of two 4.8 million metric tonnes annum liquefaction Trains with a total nameplate capacity of 9.6 MTPA.

When completed, it will more than double Adnoc’s LNG production target capacity to meet increased global demand for natural gas.

The existing liquefaction plant on Das Island in the Arabian Gulf currently has export capacity of 6 MTPA.

Baker Hughes and Adnoc announced the award at the ADIPEC oil and gas and energy conference and exhibition in the UAE.

The US company, which will book the Adnoc order in fourth-quarter earnings, said the two LNG Trains would be driven by the Baker Hughes BRUSH electric motor technology and feature the company’s world-class compressor system.

Portfolio

“This award represents an important milestone for Baker Hughes in the LNG market and demonstrates the strength of our portfolio, which we strategically expanded through the BRUSH Power Generation acquisition in 2022,”  explained Ganesh Ramaswamy, Executive Vice President of Industrial & Energy Technology at Baker Hughes. 

“Over the next decade, electrification will play a critical role in the energy transition, enabling further reduction of the carbon emissions footprint of natural gas,” added Ramaswamy.

“We are incredibly honored that Adnoc Gas, for and on behalf of Adnoc, has chosen Baker Hughes as a trusted partner to support their vision to increase LNG production while further decarbonizing their operations,” Ramaswamy stated.

Baker Hughes noted that the award continued the positive demand momentum in 2023 for the company’s gas technology equipment portfolio after securing several major LNG orders throughout the year.