LNG

UK major BP and state-owned Abu Dhabi National Oil Company (ADNOC) in the United Arab Emirates plan to form a joint venture in Egypt that will initially focus on natural gas and will incorporate Egyptian concession stakes held by BP.

The joint venture is expected to be formed in the second half of 2024 and will be 51 percent owned by BP and 49 percent by ADNOC.

The BP-ADNOC Egyptian joint venture was originally planned to be the second phase of cooperation between the two companies in the Eastern Mediterranean gas and LNG province after the planned acquisition of a 50 percent stake in Israeli gas producer NewMed Energy.

Negotiations on the proposed NewMed agreement for BP and ADNOC started in March 2023, though have been stalled since the start of Israel’s war against Hamas terrorists started in October.

Egyptian interests

“As part of the agreement, BP will contribute its interests in three development concessions, as well as exploration agreements in Egypt to the new joint venture,” said a statement.

“ADNOC will make a proportionate cash contribution which can be used for future growth opportunities,” they added.

This is the first major natural gas deal for BP under new Chief Executive Murray Auchincloss.

“The announcement with BP represents a significant step forward as ADNOC builds its international natural gas portfolio,” said Musabbeh Al Kaabi, ADNOC executive director for low carbon solutions and international growth.

“This progressive joint venture partnership will enhance Egyptian energy security and the economic potential of the region’s most populous Arab country,” Al-Kaabi explained.

Strategic partners

“Building on our long-standing strategic partnership with BP, ADNOC looks forward to continue exploring other opportunities,” he added.

William Lin, BP’s executive vice president of regions, corporates and solutions, said that the “dynamic joint venture” offered a platform for international growth.

“Together, we will build on the 60 years of safe and efficient operations of BP and its partners in Egypt,” Lin stated.

The natural gas concession to be included in the joint venture include BP’s 10 percent in the Shorouk block containing Egypt’s huge Zohr gas field.

BP’s 100-percent owned North Damietta interests are also included along with BP’s 50-percent stake in the North El Burg concession with the undeveloped Satis field.

Three other exploration concession included are North El Tabya, Bellatrix-Seti East and the North El Fayrouz block.

Dec 19 (LNGJ) - Vitol, the global commodities firm and LNG player, has completed an inaugural biofuel delivery in the United Arab Emirates. The delivery took place in Fujairah in the northeast of the UAE and the only one of seven emirates with a coastline solely on the Gulf of Oman. “Vitol has successfully completed its first biofuel deliveries in Fujairah, demonstrating its ongoing commitment to sustainable fuel solutions,” said Vitol.

   “Through its wholly-owned bunker arm, Vitol Bunkers, two vessels received B24 VLSFO on December 8 and December 14,” said Vitol. The fuel was sourced from its Fujairah-based refinery FRL and blended with regionally-sourced biofuel at storage facilities. “Certified biofuels are expected to play a key role in helping the hard-to-abate maritime sector to decarbonise and reduce greenhouse gas emissions on a well-to-wake basis,” added Vitol.

JERA Global Markets, the trading arm of Japan’s largest LNG and energy buyer and utility JERA Co. Inc., and ADNOC Gas, the recently spun-off unit of Abu Dhabi National Oil Company (ADNOC) in the United Arab Emirates, have signed a multi-year LNG supply agreement. 

Crescent Petroleum, a leading energy company in the LNG-producing nation of the United Arab Emirates, has started contracts to develop three hydrocarbon fields in Iraq with the aim being to boost Iraqi natural gas resources on a fast-track basis for domestic gas-fired power plants.

Crescent is headquartered in Sharjah, the third-largest of the seven emirates that make up the UAE after Dubai and Abu Dhabi.

As the oldest and largest private upstream oil and gas company in the region Crescent’s operations have previously focused on Egypt and the Kurdistan region of Iraq.

Crescent signed three 20-year contracts to develop oil and natural gas fields in Iraq's Basra and Diyala provinces in February 2023 and the work has now started.

The UAE company plans centre on extracting natural gas from two oil and gas blocks in the country’s northern Diyala province.

Basra oil hub

A third exploration block, located in Iraq’s main oil-producing hub of Basra, will be explored and developed to add further supplies.

The Iraqi Oil Ministry announced on October 15 that the three Crescent energy contracts were now underway aimed at increasing natural gas availability.

Iraqi Oil Minister Hayan Abdul-Ghani said in a statement that the contracts concluded with Crescent are expected to help the country produce 400 million standard cubic feet per day of natural gas within 18 months.

Abdul-Ghani explained that the first step was to help Iraq reduce gas flaring and utilize the processed gas for gas-fired power generation.

The Iraqis said they were are now set on developing strategic energy projects to extract more natural gas from the nation’s vast resources.

Crescent will build a processing plant on site as well as pipelines and infrastructure to supply the gas.

Iraq is the second-largest producer in the Organization of Petroleum Exporting Countries and depends on oil revenue to meet 90 percent of government expenditure.

Exports

The country exports about 3.3 million barrels of oil per day, while production in the semi-autonomous Kurdish region amounts to more than 450,000 barrels per day.

Power plants in Iraq currently depend on gas imports from Iran and which cover one-third of the country’s energy needs.

The Ministry of Foreign Affairs of Turkmenistan stated recently that the Central Asian former Soviet Republic planned to sell 10 billion cubic metres of natural gas annually to Iraq through a swap arrangement with Iran.

The Iraqi Minister of Electricity, Ziyad Ali Fadel, said that Iraq would receive gas from Turkmenistan through the pipeline network from Iran and the volumes would be supplied to gas-fired power plants.

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.

March 3 (LNGJ) - Abu Dhabi National Oil Co (ADNOC) has set the final price for its over-subscribed initial public offering of 5 percent of its spun-off natural gas and LNG unit, ADNOC Gas. The main energy company of the United Arab Emirates set up the ADNOC Gas subsidiary on January 1 to group its world-scale gas processing operations and gas marketing company.

   The new subsidiary at the centre of the IPO combines the operations, maintenance and marketing of the ADNOC Gas Processing and ADNOC LNG units into one consolidated business. The ADNOC Gas share price was set on March 3 at 2.37 dirhams ($0.645) per share, near the top end of the price range that was set at 2.25 to 2.43 dirhams a share. Proceeds from the IPO came to around $2.5 billion. ADNOC Gas shares are expected to begin trading on March 13.

Abu Dhabi National Oil Company (ADNOC) is proceeding with its plans to offer a minority stake in new subsidiary ADNOC Gas, which consolidates the emirate’s gas processing and LNG operations, through an initial public offering on the Abu Dhabi Securities Exchange in 2023.

Mubadala Energy, the international exploration and production company based in Abu Dhabi in the United Arab Emirates and with natural gas assets in the Eastern Mediterranean and LNG feed-gas resources in Malaysia, has reported another gas discovery in Malaysian waters offshore Sarawak.

Cosmo Energy Group of Japan has received government backing for its latest exploration and production venture offshore Abu Dhabi in the United Arab Emirates as the Japanese continue to underwrite projects related to oil and gas and LNG as well as other commodities.