The United Arab Emirates (UAE) has attracted some big industry investors in its bid to challenge the U.S., Australia, and Qatar as the world’s leading LNG exporters. Shell and fellow European energy titans TotalEnergies and BP each take 10% of Abu Dhabi’s Ruwais project; Mitsui of Japan takes another 10%.
The remaining 60% will be controlled by the operator, the state-owned Abu Dhabi National Oil Company (ADNOC). It would be the first LNG export terminal in the Middle East and North Africa region; it’s expected to generate its first deliveries in 2028.
LNG is becoming more important in the Middle East. Unlike the UAE, looking to boost its export capacity, Saudi Aramco recently signed a 20-year deal with U.S. exporter NextDecade to purchase over a million tons of LNG a year, and Qatar says it plans to increase production from its North Field project by over 80% by the end of the decade.
Shell projects demand for LNG to grow 50% by 2040 as countries and consumers look to the energy transition to lower carbon emissions from initiatives such as industrial coal-to-gas switching in less developed economies. ADNOC, for instance, says its new facility will be operated using renewable energy for its liquefaction.
The practice, which involves cryogenics to cool natural gas to about -260 degrees Fahrenheit, reduces the gas volume about 600 times for easier storage and transport. Upon delivery, the LNG is warmed to return it to its gaseous state for transportation via pipeline through a process known as re-gasification.
Qatar produces its own LNG tankers; Shell and Mitsui build their own tankers as well. Neither the U.S. nor Australia have much of a presence in the transport market despite their exporting prowess. The largest carriers, Q-Max ships, can carry up to 266,000 cubic meters of liquefied natural gas.
There are seven U.S. export terminals currently operating in the U.S. with one each in Alaska, Maryland, Georgia. Texas and Louisiana each have two.
While a Biden administration announced a pause in LNG export terminal approvals in January to update economic and environmental analyses for terminal authorization, a federal judge ruled against the pause citing inadequate justification by the Department of Energy. That decision is currently under appeal.
By Jim Felton for oilandgas360.com
