Investments to enhance gas processing, transit and import infrastructure

One of the most significant priorities for Abu Dhabi’s energy industry over the coming years will be to increase gas production to meet rising demand from a range of sectors. This also requires substantial investments in gas infrastructure, including in gas processing, transit and import facilities.

Processing Player

Much of Abu Dhabi’s existing gas-processing infrastructure is both owned and operated by Abu Dhabi Gas Industries (GASCO), a subsidiary of the Abu Dhabi National Oil Company (ADNOC). As such, GASCO is “of vital importance for the hydrocarbon supply chain of Abu Dhabi”, as Peter Verhulst, the company’s senior vice-president for operational support, puts it. The company was founded in 1978 and began commercial operations in 1981. It currently operates as a joint venture, with ADNOC holding a 68% stake, Royal Dutch Shell and France’s Total each with 15%, and Portugal’s Partex holding 2%. The initial deal was signed in 1978, and subsequently renewed for another 20 years in 2008.

The company’s beginnings lie in the decision taken by the late Sheikh Zayed bin Sultan Al Nahyan, the founder of the UAE, that Abu Dhabi should not waste its associated gas by burning it off (flaring), but should use it productively. Associated gas is found with oil deposits and brought to the surface during the oil extraction process. In some parts of the world, flaring is common, with implications both for wastage of a valuable resource and environmental damage. Even so, Abu Dhabi has successfully adopted a zero-flaring policy.

In 2001, Atheer, a non-associated gas company that is 100% owned by ADNOC, was incorporated into GASCO, bringing with it the Habshan gas processing plant, which the merged company has continued to expand. As Abu Dhabi’s oil production has plateaued, so has output of associated gas, while demand has continued to rise.

GASCO’s 2150-km pipeline network will be extended by 800 km over the next two years. This growth will help support gas delivery to both new and existing customers in the emirate. “To support industrial development the domestic pipeline network has been expanded and is in a position to meet anticipated local gas demand until 2025,” Abdul Aziz Al Ameri, the CEO of GASCO, told OBG. “However, the forecast for gas demand can change rapidly.”


GASCO has continued to increase its production to meet growing demand in recent years. Following its latest expansion phase, concluded in 2013, the company now has processing capacity of 8m standard cu feet (scf) per day. “For the past 10 years investment of roughly $30bn has been made to expand gas processing capacity whereby it can now meet the needs of the market for the foreseeable future,” Al Ameri told OBG. “The main objective going forward will be to focus on asset integrity, to consolidate activities and to ensure targets are met without interrupting upstream oil production.” At the heart of GASCO’s operations is the Habshan and Bab gas complex between Abu Dhabi City and Ruwais. The complex produces network gas (methane) that is delivered directly to end-users, as well as natural gas liquids (NGL), condensate and liquid sulphur.

The two Asab plants – 0 and 1 – are situated to the south-east of Habshan. Asab 0 processes associated gas from the nearby Abu Dhabi Company for Onshore Petroleum Operations (ADCO) oilfield, and extracts both NGL and network gas. Meanwhile, Asab 1 concentrates on processing condensate-rich gas that will be delivered to the Ruwais refinery, which is owned by a subsidiary of ADNOC, Abu Dhabi Oil Refining Company (Takreer).

The Bu Hasa NGL extraction plant, located south of Ruwais, also processes ADCO-sourced associated gas, extracting NGL that is sent to the Ruwais plant, in addition to network gas that can be sent on to ADCO for reinjection.

Development Project

In 2013, GASCO completed its $11bn integrated gas development (IGD) project, combining onshore and offshore elements at Habshan and Ruwais, respectively. The increases in capacity are designed for new gas from Abu Dhabi Marine Operating Company’s (ADMA-OPCO) offshore Umm Shaif and Khuff fields.

The IGD included the new Habshan 5 complex, 15 km north-east of the existing plants, adding total capacity of 2bn scf per day with sulphur recovery rates of 99.9%, both cutting down emissions and increasing the product available for export. Habshan 5 receives gas from ADMA-OPCO via Abu Dhabi Gas Liquefaction Company (ADGAS), as well as onshore gas from ADCO and the Habshan plant. Accordingly, it sends sales gas to the gas network, NGL to Ruwais for fractionation and liquid sulphur to Habshan for granulation. The project was also able to contribute to the expansion of GASCO’s Ruwais facilities with a new production train with a capacity of 27,000 tonnes per day of NGL.

Storage capacity was given a boost as well with the addition of six new liquefied petroleum gas (LPG) tanks with a total capacity of 110,000 cu metres and a 90,000-sq-metre increase in paraffinic naphtha storage. Going forward, Verhulst expects GASCO to source more NGL through the development of sour gas fields such as Shah – which was developed by Al Hosn Gas and has already commenced production – as well as the Bab field development project, where gas lies beneath an oil deposit. This project is expected to start producing commercially in 2020. “The easy gas is largely gone,” Verhulst told OBG.

Sector For Adgas

The offshore segment of the IGD involved increasing the production capacity of the facilities on Das Island, which is responsible for processing and marketing liquefied natural gas (LNG), LPG, paraffinic naphtha and sulphur. ADGAS is also playing a leading role in boosting Abu Dhabi’s gas production capacity, with the intention of maintaining the emirate’s exports while also meeting the rising demand on the domestic market.

This role is performed through the construction and commissioning of the Offshore Associated Gas project (OAG) and the Integrated Gas Development (IGD) facilities in 2010 and 2013, respectively. The OAG was commissioned with export capacity of 200m scf per day of gas, which increased to 1bn scf per day with the commissioning of IGD. Both OAG and IGD facilities receive, compress and dehydrate gases, which is then exported to the Habshan facilities through a 30-inch gas subsea pipeline for further processing, thus increasing the supply of gas for domestic use. Further modifications of the IGD facilities are planned that will increase the gas supply to 1.4bn scf per day by 2018.

Currently, ADGAS exports around half of its gas products, mainly to its strategic client, Tokyo Electric Power Company, with which ADGAS has had a series of long-term sale agreements. ADGAS exports are used to generate electricity for the Japan’s capital Tokyo. ADGAS is proudly responsible for the lion’s share of the UAE’s gas exports, of which 95% went to Japan in LNG form as of 2012, according to the US Energy Information Administration.

Products & Customers

GASCO’s production from its various plants includes 3.7bn scf per day of sales gas; 10,000 tonnes of ethane; 280,000 barrels of condensate; 30,000 tonnes of propane, butane and paraffinic naphtha; and 6000 tonnes of sulphur.

GASCO’s network gas customers include Emirates Aluminium, Takreer, ADNOC, ADCO, Abu Dhabi Polymers Company (Borouge), Abu Dhabi Water and Electricity Company (ADWEC), Emirates Steel and companies operating natural gas vehicles. These are all regarded as fast-growing enterprises, and many are central to Abu Dhabi’s long-term economic and urban development, as well its aims of economic diversification – GASCO is likely to see growing demand for the foreseeable future, hence its ongoing investments in capacity. Overall, 52% of GASCO’s sales gas goes to ADNOC group companies, with the remaining 48% sold to industrial customers.

Condensate is delivered to Takreer Refineries for processing. The NGL is sent to GASCO’s Ruwais plant for fractionation into four products: ethane, propane, butane and paraffinic naphtha. The ethane is sent to the cracker operated by Borouge. From its Ruwais shipping facilities, GASCO’s shareholders export the propane, butane, granulated sulphur and paraffinic naphtha to markets including China, India, Japan, Korea, France, Turkey, Malaysia and the US. Takreer also receives some ethane, propane and butane.

Dolphin Pipeline

The emirate of Abu Dhabi is a net importer of gas and on an energy transit route from the centre of the Gulf to the south-east of the Arabian Peninsula. One of its most important pieces of gas infrastructure is Dolphin Energy’s Dolphin Gas Project, which carries lean gas from Ras Laffan in Qatar (the world’s largest liquid gas exporter) to Taweelah, just north-east of Abu Dhabi City. Dolphin Energy is a joint venture between Mubadala Development Company, the Abu Dhabi government-owned investment firm, with 51%, and Total and Occidental Petroleum Corporation, with 24.5% each.

Demand For Utilities

The $5.8bn Dolphin Gas Project involved the development of upstream infrastructure, a gas processing and compression plant at Ras Laffan in Qatar, a 364-km undersea pipeline and receiving facilities at Taweelah.

These then link to the UAE’s gas distribution system, taking gas to Abu Dhabi, Al Ain, Jebel Ali, Fujairah and on to Oman. As of early 2015, Dolphin Energy was importing 2bn scf of natural gas per day, or 333,000 barrels of oil equivalent, Ibrahim Ahmed Al Ansaari, Dolphin Energy’s CEO, told OBG.

The company’s biggest customer is ADWEC, which uses the imported methane for electricity generation and water desalination. “In the summer of 2014, ADWEC didn’t have to use backup fuel in order to keep up with electricity production, which is a testament to how successful the Dolphin Gas Project is,” Al Ansarri told OBG.

Utilities in Sharjah account for significant UAE demand, and Dolphin Energy is exploring options to construct a pipeline to the emirate. The firm hopes to ramp up exports to the pipeline’s capacity of 3.2bn scf per day. Al Ansaari is confident that, given the demand matrix, Abu Dhabi will continue to need imported gas for the foreseeable future.

This judgement is likely correct, due to the long lead times on sour gas and nuclear projects and growing consumption, even with the government’s efforts to encourage efficiency.

“Hydrocarbons, and gas in particular, will still be the majority source of energy for the emirate, especially as the demand for utilities continues to increase,” Al Ansaari said. “Even with an increase in domestic supply, there will still be a need for importing gas via Dolphin or LNG imports.”

Emirates LNG

The latter will be increased by a new LNG terminal to be developed by Emirates LNG at the port of Fujairah. Bids for the main facilities construction will be received and assessed during Q1 2015 and government approval will then be sought. In March 2012, the government of Abu Dhabi established Emirates LNG, a 50:50 joint venture between two of its investment companies: the International Petroleum Investment Company and Mubadala Petroleum. Meanwhile, Emirates LNG has been tasked with developing import capacity to supply the growing UAE market, and its Fujairah terminal is expected to handle around 9m tonnes of LNG per annum – equivalent to 1.2bn scf per day.

Indeed, the geographical location of the new terminal will be particularly significant for the UAE. It lies outside the Straits of Hormuz, which will have the effect of reducing costs while allowing access for the world’s biggest ships. The LNG terminal will therefore be in a good position to assist in developing Fujairah’s position as a regional energy hub.

You have reached the limit of premium articles you can view for free. 

Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.

If you have already purchased this Report or have a website subscription, please login to continue.

The Report: Abu Dhabi 2015

Energy chapter from The Report: Abu Dhabi 2015

Cover of The Report: Abu Dhabi 2015

The Report

This article is from the Energy chapter of The Report: Abu Dhabi 2015. Explore other chapters from this report.

Covid-19 Economic Impact Assessments

Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.

Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.

Register Here×

Product successfully added to shopping cart