|Business Home > Archive|
Mubadala, Ipic to set up LNG facility in Fujairah
Issac John / 23 March 2012
DUBAI — Mubadala Oil & Gas, a business unit of Mubadala Development Company, and International Petroleum Investment Company, or Ipic, confirmed on Thursday the establishment of a joint project —Emirates LNG — in Fujairah.
The project, seen by analysts as strategic as it would enable vessels to supply the fuel without passing through the Strait of Hormuz, will incorporate the latest, proven floating LNG storage and regasification unit technology.
Iran threatened earlier this year to close the Strait in response to sanctions that the US and Europe are imposing because of the Islamic republic’s nuclear programme.
Recognising the growing importance of Fujairah in the event of a conflict that could choke the strategic Strait of Hormuz, several other oil and gas companies are setting up base in the east coast emirate.
China Petroleum & Chemical Corp, known as Sinopec is yet another company planning to store fuel in Fujairah.
Both Abu Dhabi companies said in a joint statement that the project was aimed at securing additional gas supplies to meet energy demand from the UAE’s growing economy.
“As the Emirates LNG project develops, it is envisaged that a specific project company will be formed by Mubadala and Ipic. The Emirates LNG project will develop a new liquefied natural gas (LNG) regasification facility in Fujairah,” the statement said.
The proposed LNG terminal would be built in two phases, each having a capacity of 600 million standard cubic feet per day. The first phase will include a floating storage and regasification terminal and will be completed in the second quarter of 2014. An onshore import terminal will be built a year later.
The project team, drawn from Mubadala and Ipic and supported by a number of expert advisors, is already firmly established and a range of work streams is well underway. Mubadala Oil & Gas is a business unit of Mubadala Development Company with exploration and production interests. Current working interest production is in excess of 400,000 barrels of oil equivalent per day.
Ipic is a wholly owned Government of Abu Dhabi company with a focus on investments in international energy and energy-related industries.
Fujairah’s location outside the Strait of Hormuz oil- shipment chokepoint gives it an advantage in attracting international oil traders and tank operators to expand in the emirate.
Vitol Group and Royal Vopak NV may add crude oil tanks at storage sites in Fujairah where they are partners, he said. The companies, which have stakes in separate fuel storage ventures there, are evaluating plans to add as much as one million cubic meters of crude storage capacity each. Fujairah’s capacity for storing crude oil and refined products is set to rise to 13.3 million cubic meters in 2015, from about 6.8 million cubic meters by the end of this year.
Sinopec will take up about half the 1.1 million cubic meters of oil products storage that Singapore-based Concorde Energy plans to build in Fujairah, Salem Kelil, an official of the Fujairah government was quoted as saying by Bloomberg.
That project is due to be completed by the third quarter of 2014, he said. Gulf Petrochem is set to begin operating storage space from 412,000 cubic meters of new tanks by the end of this year.
comments powered by Disqus
|Opinion & Analysis|