Relocation plans: Adnoc poised to move planned LNG terminal out of Fujairah



Abu Dhabi National Oil Company (Adnoc) is set to move its planned liquefied natural gas export terminal from Fujairah to Al Ruwais in Abu Dhabi, as it aims to further optimise costs at the flagship 9.6 million tonnes per annum facility.

Adnoc confirmed the development on Tuesday — without mentioning Fujairah — and said the decision to move the LNG project to Ruwais has been taken during the project’s early engineering phase.

“As part of the design phase, Adnoc announced today that its world-class, low-carbon LNG growth project will move forward in the Al Ruwais Industrial City, Al Dhafrah, Abu Dhabi,” the operator said.

Adnoc said that “the selected location offers significant synergies and existing infrastructure that will be leveraged to deliver project efficiencies, unlocking additional value for Adnoc, its partners and the UAE”.

It added that “following a comprehensive evaluation of location options during the ongoing design phase, the proximity of Al Ruwais to Adnoc’s current operations, as well as its future growth projects, in addition to a well-established local supplier base were important considerations in the company’s decision”.

One industry source pointed out that moving the LNG project to Ruwais would improve costs for Adnoc, saving on hundreds of kilometres of pipeline required for the Fujairah project.

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Upstream recently reported that at least two leading international contracting groups are preparing to bid for a multibillion-dollar contract from Adnoc for work on the Fujairah LNG (now Al Ruwais) export terminal.

The company noted that through “its planned LNG growth project, Adnoc intends to more than double its LNG production capacity to meet increased global demand for natural gas”.

“The plant, which is designed with electric-powered processing facilities, will run on renewable and nuclear grid power making it one of the lowest carbon intensity LNG facilities in the world,” it added.

The two-train, 9.6 million tpa terminal is expected to cater to several gas markets, with a likely focus on rising demand in Europe.

One of those poised to compete for the prize is a grouping of McDermott International of the US, Italy’s Saipem and South Korean giant Hyundai Engineering & Construction (E&C), Upstream learns.

The rival consortium comprises French giant Technip Energies, Japan’s JGC and Abu Dhabi’s National Petroleum Construction Company (NPCC).

Last year, McDermot landed a sizeable front-end engineering and design contract from Adnoc for work on the LNG facility and said it will be designed to “significantly reduce” greenhouse gas emissions, with features such as electric drives for the liquefaction compressors.

KBR of the US won the project management consultancy contract for the envisaged LNG terminal, Upstream understands.

The liquefaction plant will include process facilities, flares and utilities. LNG storage tanks, an export jetty — with an option for bunkering — and other associated facilities are also likely to be involved.

Subsidiary Adnoc LNG already produces about 6 million tpa of LNG from its facilities on Das Island off the coast of Abu Dhabi.

The company is owned by Adnoc with a 70% stake, with Mitsui holding 15%, BP 10% and TotalEnergies 5%.

Abu Dhabi’s LNG export plans are a part of its drive to become a key gas exporter in the long term and to reduce the UAE’s dependence on imported Qatari gas.

Competing with Qatar

The UAE aims to emerge as a key LNG exporter on the back of several upstream developments, including the Hail & Ghasha sour gas scheme.

The company is swiftly progressing with the development of the multibillion-dollar project, which could significantly boost its gas production.

The UAE consumes about 1.8 billion cubic feet per day of Qatari gas imported via the Dolphin pipeline and also has LNG purchase agreements with its neighbour.

The Ruwais LNG terminal could boost the country’s status to become a major regional LNG exporter, thus competing with Qatar and reducing its dependence on imports.

European nations are increasingly looking to the Persian Gulf region to secure LNG and ammonia supplies as they try to wean themselves off Russian gas imports.

Several energy supply agreements were signed between European nations and Middle East national oil and gas companies last year, mostly set up by government-to-government deals.

Last year, Adnoc signed deals with Austrian and German companies for supplying LNG cargoes in the coming years.

Regional giants including Adnoc, Saudi Aramco and QatarEnergy are stepping up gas and hydrogen investments, eyeing a larger stake in a European energy market impacted by the Ukraine war.