NEW OPPORTUNITIES

Ras Al Khaimah | ENERGY | FOCUS: GAS DEVELOPMENTS

Ras Al Khaimah has undertaken several initiatives to diversify its gas sources and assets, both locally and abroad.

With several downstream industries relying on gas for energy and power supply, the diversification and security of gas imports, as well as domestically sourced gas, is crucial for Ras Al Khaimah's economy.

The UAE is a net importer of gas, which is used to generate 98% of its power. Since its establishment in 1984, the state-owned company RAK Gas has been exclusively responsible for sourcing and supplying gas to the northern-most Emirate of Ras Al Khaimah.
RAK Gas states that its mission is to generate growth and revenues for the government while ensuring a secure supply of energy in the fast-growing Emirate. In doing so, it must meet increasing demand from large and highly energy-intensive industries, including downstream customers such as ceramic manufacturers, the cement industry, glass factories, and other industrial users.
The establishment of RAK Gas was linked to the extraction and processing of gas from the domestic Saleh field, situated 45km offshore. Output from the Saleh field peaked at about 70 million cubic feet of gas per day in 1986; then, overall production declined, and the field produced intermittently from 1996 for a further 20 years.
Following the eventual production shutdown of the Saleh field in 2016, RAK Gas has sourced most of its gas through the Dolphin Pipeline, which meets the Emirate's entire industrial energy requirements and 30% of the total energy requirements of the UAE.
The Dolphin Pipeline, constructed in 2003, remains the largest energy-related venture in the region. The pipeline is operated by Abu Dhabi's Dolphin Energy Limited and transports natural gas from Qatar's North Dome gas field to the UAE and Oman. Despite regional tensions during 2017, Qatari and UAE officials allayed fears that gas flows from the North Dome would be interrupted.
In addition to the 2 billion cubic feet of natural gas delivered per day to the UAE through the Dolphin Pipeline, of which some is bought by RAK Gas, RAK Gas also sources gas from Umm Al Quwain, and the Bukha and West Bukha fields in Oman.
The company continues to explore the potential and opportunities of picking up assets in international markets. To this end, RAK Gas has built exploration portfolios in Tanzania, Malawi, Egypt, and Somaliland, which it claims are excellent geological areas with an extremely high potential for finding oil and gas.
Within Ras Al Khaimah, RAK Gas launched an upstream licensing round in the second quarter of 2018 allowing prospective companies to bid for acreage to explore for commercially feasible deposits for extraction.
Said to be a priority project for the company, the additional gas discovered in these domestic fields will offset the decline in gas production within Ras Al Khaimah and further support the ceramics, glass and cement industries while reducing costs for consumers.
The licensing round follows RAK Gas' review of the Emirate's onshore and offshore sub-surface potential. It used play-based exploration (PBE) to build its domestic exploration portfolio, which has been packaged into four offshore and three onshore concessions spanning a total of 4,000sqkm. The complex geology, which is unique to Ras Al Khaimah, creates multiple play opportunities. Using PBE methods, prospect probabilities are weighted against plays for a more nuanced analysis and better investment decisions. RAK Gas has also recently acquired 3D seismic over the offshore blocks to increase the accuracy of identifying prospective hydrocarbon deposits.
The Saleh field is also being offered in the licensing round as RAK Gas believes there are significant resources still to be produced there. There is also an oil discovery called RAK B that will also be offered as part of the round.
The initial bid round was launched in late March 2018 with data rooms opened in April both in Ras Al Khaimah and London. Prospective bidders have also had the opportunity to view the new offshore 3D seismic. Bids for the onshore and offshore blocks will be submitted in mid-November, with the final selection to be announced in late November 2018.
The Emirate is counting on new domestic opportunities to reduce reliance on piped gas while continuing to power the rapid growth of the economy and its energy-intensive industries.