It may be full steam ahead for coal-fed power plants in UAE
Published: 02/12/2006 12:00 AM (UAE)
By Ahmed A. Elewa, Staff Reporter
Abu Dhabi: The UAE, holder of the world's fifth largest gas reserves, may build coal-burning power plants for the first time to help meet rising demand for energy spurred by a booming economy, a company official said.
"Alternative sources of energy for power generation including coal are being discussed," Peter Barker-Homek, Chief Executive Officer of Abu Dhabi National Energy told Bloom-berg.
Abu Dhabi is producing about 4.5 billion cubic feet of natural gas per day, of which 3.6 billion is for local consumption, mostly to generate energy, and 720 million cubic feet per day is exported in the form of Liquefied Natural Gas (LNG).
"Abu Dhabi ranks fifth worldwide in terms of reserves, with 213 trillion cubic feet. However, these reserves are mostly high in sulphur and hydrogen sulphite which raises the cost of making it useful," said Raja Kiwan, an industry expert.
Abu Dhabi is negotiating with international oil companies, such as ExxonMobil, Shell and BP, to evaluate the production in the fields of Buhassa and Shah and others, he added. The target is to increase the production to 6 billion cubic feet per day.
By the first quarter of 2007, an additional 2 billion cubic feet per day will be pumped through the Dolphin pipeline from Qatar. And there is an extra capacity for this project of about 1.2 billion cubic feet per day.
Negotiating
"We are negotiating with Qatar an additional 1.2 to 1.4 billion cubic feet per day," said Khaldoon Khalifa Al Mubarak, chairman of the Abu Dhabi Executive Affairs Authority.
If the negotiations succeed, the total production of natural gas will pick up to almost 8 billion cubic feet per day, or even to 9.5 billion if the production expansion plans succeed.
However, analysts agree that Qatar's decision in this respect can only be for political reasons, as it is more lucrative to export the gas in the form of LNG.
Increase
At present, power generation and exports account for most of the production. However, if the transport sector gets a share, the local consumption will increase significantly given the future expansion of power generation to cater for the new developments in Abu Dhabi.
The fact that Abu Dhabi produces and imports natural gas is based on purely commercial reasons according to Al Mubarak. However, the expected significant increase in local consumption might shift the balance dramatically.
Abu Dhabi needs to add as much as 2,000 mega-watts a year of power generation capacity over the next 15 years to meet rising demand from industries and a growing population, Abdullah Saif Al Nuaimi, director of privatisation at the Abu Dhabi Water Electricity and Water Authority, said earlier.
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