What is your analysis of the gas market today?
Abu Dhabi and the UAE are growing rapidly. That economic growth will have to be supported with increased energy production. When you consider Abu Dhabi's Vision 2030, energy requirements become even more crucial, and gas is a major part of it. There are calls for the diversification of energy resources, which is why nuclear and renewables are also there in terms of solar energy and gas. Shah Gas is here to meet that requirement and meet future expected growth. The demand for gas today outstrips supply and UAE has been a net importer of natural gas for a number of years. The demand-supply gap is increasing with rapid industrialization across the UAE. Al Hosn Gas will be producing 500 million standard cubic feet per day, which is approximately 10% of current UAE gas production, in an effort to reduce the shortfall in gas supplies. All of our natural gas production will be for domestic consumption.
How is Al Hosn Gas continuing to innovate to meet the growing domestic energy needs?
Innovation is imperative in terms of meeting the energy needs of the UAE. The “low hanging" energy sources such as natural gas from conventional fields are already exploited and cannot be relied upon solely to meet energy requirements. As a result, forays into tapping unconventional gas reserves such as sour gas, tight gas, and shale gas are inevitable, and this requires innovation and the adoption of state-of-the-art technologies. Also, the UAE is wisely diversifying its energy mix using nuclear and solar energy sources in addition to traditional fossil fuels. So, yes, innovation is widely prevalent in both the planning and execution of projects in the energy sector.
What are some of the advancements in engineering, materials, machinery, and state-of-the-art technology that have contributed to making local sour gas accessible in Abu Dhabi?
The Shah Gas Field was discovered in the 1960s; however, it was not technically feasible to develop until recently. This project could be undertaken only because of the technological advancement that has occurred over several decades in the fields of drilling, reservoir management, facilities design and engineering, metallurgy, and equipment manufacturing, for example. Abu Dhabi has been quick to grab the opportunity to adopt the latest technological advancements. From Al Hosn Gas' perspective, the moment we were entrusted with the responsibility to implement this project, we realized it was not business as usual. We meticulously planned the front-end engineering and design of the facilities and pipelines, paying attention to areas as diverse as selection of metallurgy and equipment, layout, and spacing of the gas plant, segregation of sour gas and sweet gas areas in the plant, plant maintenance philosophy, designing a control room with state-of the-art technology, and much more.
What sort of market conditions will be required to achieve sustainable sour gas production in the long term?
The gas supply-demand imbalance is projected to continue and expand through the foreseeable future. The alternative to sour gas is imported LNG, which is more expensive. And so, the economics of sour gas is robust and, furthermore, it contributes to domestic energy security, which is a paramount strategic consideration; the challenge is developing it in a safe and sustainable manner.
How has multinational collaboration benefited the sector?
ADNOC has been one of the first NOCs to adopt a multinational collaboration model. That model has been a win-win situation. It has served the UAE as well as the foreign partners quite well. It has given the UAE access to the latest technology while the foreign partners profited from accessing and developing the UAE's vast oil and gas reserves. The Al Hosn Gas partnership between ADNOC and Occidental has been exemplary, with both shareholders bringing unique and complementary strengths to the partnership.