Sharjah plans to moor FSRU at Hamriyah

Sharjah plans to follow in the footsteps of Dubai and Abu Dhabi by importing LNG through an FSRU. The planned project will have a capacity of 14.2 million cubic metres per day and will be moored at Hamriyah Port. Sharjah National Oil Co. (SNOC) signed a memorandum of understanding with Germany’s Uniper in October to form a company that will be responsible for importing the LNG.

SNOC is carrying out a study at the port in preparation for the project. It wants to keep new infrastructure investments to a minimum and allow the port to continue its normal operations, SNOC and Uniper told Interfax Natural Gas Daily in a joint statement. The companies will form a joint venture that will lease an FSRU.

Gas from the vessel will flow to Sharjah’s Sajaa gas field complex and then into the existing pipeline network throughout the northern emirates. The Moveyeid gas field will be converted into an underground storage facility, providing an alternative supply should the LNG imports be interrupted.

The SNOC-Uniper JV will buy LNG through a combination of long-term, short-term and spot cargoes. "The underground gas storage facility will provide considerable flexibility to bring in cargoes on an ad hoc as well as a planned basis," the companies said.

The JV is negotiating with potential buyers for the gas. One of the project’s main objectives is to ensure buyers in the northern emirates can access gas as they need it. "Our first goal is to import sufficient gas to meet demand in Sharjah and the northern emirates at a competitive price and to support the economy generally," said the JV.

The United Arab Emirates’ (UAE’s) latest LNG import project will help Sharjah and the northern emirates meet their growing demand for gas over the next 10 years and give the country’s smaller emirates greater energy independence from their more influential neighbours.

Aside from LNG imports, Sharjah and the northern emirates are also stepping up piped gas purchases from Qatar via the Dolphin pipeline. Sharjah Electricity & Water Authority and RAK Gas, which supplies gas to the emirate of Ras al-Khaimah, signed a deal with Dolphin Energy in October to receive greater volumes.

There are many reasons why Sharjah does not want to depend on the UAE’s other emirates, according to SNOC. First, the economy of the northern emirates has grown significantly over the past 10 years, and so the region needs more gas. Second, multiple landing points along the UAE’s Gulf coast are seen as preferable for ensuring security of supply.

Also, the UAE’s gas demands are highly seasonal, and this is another reason to import gas. "Managing the seasonal variation in gas demand during a period of rapid development presents a challenge, and historically this has been managed with domestic gas fields […] the infrastructure was installed with this in mind," said SNOC and Uniper. "But as these fields are depleting, the gas supply now has to come from imports that require additional facilities."

Independent emirates

While Sharjah’s actions suggest that it is trying to achieve greater energy independence, the individual emirates have always acted semi-autonomously.

"Federal energy policy is really just a matter of guidance," Robin Mills, chief executive of consultancy Qamar Energy, told Interfax Natural Gas Daily. "Dubai got its [LNG import project] first and then Abu Dhabi realised that it had a short-term need for gas. Then Sharjah has been struggling with gas for years and has finally decided to come to this too. You’ve got three separate entities all trying to secure their own gas."

For Sharjah, it makes sense to moor an FSRU instead of investing in a permanent facility. "I think for Sharjah it’s just realistic for the size of the market, particularly as they signed for some more Dolphin gas recently. They wouldn’t need a lot more gas," said Mills. "The FSRUs are quick, cheap and they don’t involve the commitments [of] a land-based terminal."

Sharjah’s motivations for importing LNG are similar to Dubai’s when it started receiving the fuel in 2010. Dubai doubled its regasification capacity a year ago, while Abu Dhabi commissioned its first LNG import project earlier this year. Excelerate Energy delivered the vessel to Ruwais, which lies 240 km west of Abu Dhabi city, in August.

Abu Dhabi had planned to build a permanent facility in Fujairah, but the Emirates LNG project has since been put on hold indefinitely. The land-based terminal, which was to have a capacity of 9 mtpa, would have been almost three times bigger than the Ruwais FSRU. An FSRU based at Fujairah may be considered in the future, Nasser al-Suwaidi, director of the petroleum economics department in the UAE’s Ministry of Energy, told Interfax Natural Gas Daily.

Suhail al-Mazrouei, the UAE’s energy minister, said last year that other LNG import facilities would follow Emirates LNG. The UAE is also considering building an LNG terminal at Khalifa Port in Abu Dhabi. A study has been carried out to determine the feasibility of the project.