UAE's Reliance on Imported Gas Set To Grow

The UAE will have to depend more on imported gas and set up alternative energy projects to ensure the country’s demand is met as most of its natural gas is associated with oil, Abdulhamid Al Bassam, an economic consultant at the Riyadh-based Gulf Cooperation Council Secretariat wrote in Saudi Gazette.

Since the country is bound to OPEC production quota agreements, it cannot sharply increase its crude output and this will restrict any major rise in gas supplies, he said.

He noted that outlook for UAE’s gas production growth seen at just 0.8 per cent compared with the Gulf region’s growth projections of 2.5 per cent till 2035.

Moreover, in the immediate future, in the next 5-10 years, supply is projected to be almost flat around 50 billion cubic meters per year, Al Bassam said.

He said that since UAE gas is associated gas, supply will increase is when crude oil production increases. However, even in the most liberal scenario, crude oil production is not likely to rise adequately to meet gas requirements. Besides OPEC agreements, there are capacity constraints for extracting oil.

Apart from domestic sources, UAE currently get majority of its gas from Qatar through the Dolphin pipeline.