UAE to shunt Hormuz Strait with Fujairah Terminal
Mubadala Petroleum and the International Petroleum Investment Company (IPIC), both from Abu Dhabi in the United Arab Emirates, are preparing the engineering, procurement and construction (EPC) phase for their Emirates LNG project in Fujairah.
Established in 2002 by the State of Abu Dhabi, the Mubadala Development Company (Mubadala), is the flagship of the Emirate to diversify the national economy in investing in strategic projects in the UAE and overseas.
After ADNOC and Shell signing the development of the Bab Sour Gas project, the United Arab Emirates (UAE) continue to deploy their strategic plans to secure the supply of the UAE with natural gas.
For some years the UAE have anticipated to run short of gas because of its growing consumption for:
– Gas injection to maintain the plateau production on maturing crude oil fields
– Electrical power generation
– Water desalination
– Petrochemical industry
– Metal industry
Since 2007, the Dolphin Energy pipeline, currently under capacity expansion, is providing the UAE with external source of supply in natural gas coming from Qatar in the north.
Projects like Bab Sour Gas should help the local production of natural gas but have no chance to meet the domestic market consumption.
In this context, the UAE decided to build a receiving terminal for the import of liquefied natural gas (LNG) and regasification.
In selecting Fujairah to build such Emirates LNG terminal, the UAE will increase costs as it may require additional pipelines system for the distribution across the UAE but it secures the transportation in shunting the Strait of Hormuz.
In order to adjust the supply of this natural gas to the growing needs in the UAE, the Emirates LNG project should be developed in two phases:
– First phase should be offshore and is expected to receive the first shipments in 2015
– Second phase should be onshore and should start operations in 2016.
In 2010, the US broker and energy transportation advisor Poten and Partners performed a feasibility study of this Fujairah LNG terminal and regasification project and confirmed the economic and strategic interest of such location and investment.
Technip completed FEED on Emirates LNG Terminal
In 2012, Mubadala and IPIC awarded the front end engineering and design (FEED) to the engineering company Technip from France, together with the Fujairah Refinery project.
Based on this FEED work, the first phase of the Emirates LNG terminal and regasification project has been designed as a floating vessel to be moored offshore the Fujairah Emirate, along the northern coast.
The Emirates LNG terminal offshore installations should have a capacity of downloading and regasify 4.5 million t/y of LNG.
In April, Mubadala and IPIC released the call for tender for this first phase to the six engineering companies pre-qualified for this EPC contract:
– Chiyoda from Japan
– Hyundai Engineering and Construction from South Korea
– Saipem from Italy
– Samsung Engineering from South Korea
– Samsung Construction and Trading from South Korea
– Techint from Italy
These companies were due to submit their technical offers for the first phase of Fujairah LNG terminal project to Mubadala and IPIC on May 19th and the commercial bids on June 1st in order to make a final investment decision on the second half of 2013.
The second phase of the Emirates LNG project should be tendered separately as to be constructed onshore closed to the gas-fired Fujairah I and Fujairah II combined power generation and desalinization facilities.
In plugging the Emirates LNG Terminal and Regasification project to Fujairah utilities, Mubadala and IPIC secure their gas supply as well as their power and water supply to the UAE.
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