New giant gas fields in Saudi and UAE add to growing Mideast Gulf supply

• Published date: 01 March 2020
• DOI: http://doi.org/10.1111/oet.12763
• Date: 01 March 2020

GAS AND POWER

New giant gas fields in Saudi and UAE add to growing

Mideast Gulf supply

New large gas finds and developments in Saudi Arabia

and the UAE, one of the Middle East's key importers, is

likely to alter the supply-demand balance in the Mideast

Gulf, and could see exports from the region rise by more

than expected over coming years.

In late February, Saudi Arabia said it was reviewing

development plans for its newly discovered Jafurah

unconventional wet gas field that holds an estimated

200 tn ft

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of reserves—which is a huge field about a fifth

the size of Qatar's North Dome (the biggest conventional

gas field in the world), although eventual recovery rates

will likely be lower. A phased development of the field is

expected to lead to first gas by 2024, gradually increasing

output to 2.2 tcf/y by 2036.

Saudi Aramco plans to export some of the gas to help

reduce the nation's reliance on sales of crude, but the

majority is expected to go to domestic power plants

(alongside renewables, replacing oil) and as feedstock for

petrochemicals. Jafurah is located between Ghawar, the

world's largest oil field, and the Gulf, near the hub of the

Saudi energy industry and existing export facilities.

Saudi gas plans also include production from the

11 tcf offshore Dorra gas field in the Partitioned Neutral

Zone that it shares with Kuwait, after the two reached a

resolution to a 5-year dispute in the area late last year.

Dorra may also reduce Kuwait's needs for gas imports

(although Kuwait signed a new long-term deal last

month with Qatar/Shell for 1 mn t/y), while freeing up

other Saudi gas for export. The field could even support

its own liquefied natural gas (LNG) export project.

1|NO MORE IMPORTERS

The new fields will mean Saudi Arabia can easily con-

tinue to satisfy its growing domestic gas demand with

domestic reserves—the country's gas processing capacity

is expected to reach 18.9 bcft/d by 2022. Neighboring

UAE, on the other hand, has been the region's biggest

net importer. But major new finds there too mean that

now looks about to change, removing the region's last

major importer and adding to its ranks of sellers.

Abu Dhabi's state oil company, ADNOC, recently dis-

covered a giant shallow gas discovery with estimated

reserves of 80 tcf, which will enable the UAE to become

self-sufficient in gas with surplus for export—reversing

the need for pipeline imports to Dubai from Qatar and

LNG deliveries. The field is the biggest global conven-

tional gas discovery since Turkmenistan's Galkynysh

field in 2005 and could be “hugely significant”for the

UAE, according to Wood Mackenzie. The company will

use both standard and unconventional drilling tech-

niques to extract the gas.

The find was the UAE's second gas discovery with-in

a week, with Eni and the UAE's Sharjah National Oil

Corp (SNOC) discovering gas and condensates in the

emirate of Sharjah. SNOC said it was the first onshore

Sharjah discovery in 37 years, with the well achieving

flow rates of up to 50 mncf/d of lean gas and associated

condensate.

The UAE had already been progressing toward a goal

of gas self-sufficiency by 2030 by tapping sour gas

reserves and gas from its oilfield gas caps. After rising in

the first half of the last decade, net UAE gas imports fell

to a 4-year low of 11.9 bcm in 2018 as domestic output

rose. This included a record 18.2 bcm of pipeline imports

from Qatar to Dubai through the Dolphin pipeline,

which has continued to flow despite a political dispute

between the two countries.

Dubai also imported 1 bcm of LNG in 2018, down

sharply from 3.46 bcm in 2017. This is likely to have

risen in 2019 and early this year due to current low LNG

prices (with Dolphin pipeline imports consequently

likely to have been lower, after the record year in 2018).

Dubai imports the remainder of its needs (and the vast

majority—UAE produced 64.7 bcm of gas in 2018, com-

pared to a total cons umption of 76.6 bc m) from neigh-

boring Abu Dhabi, which also exported 6.7 bcm of LNG

to international markets in 2018 from its Das Island

plant.

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