Regional LNG industry gains new impetus with the launch of Dubai’s storage facility

With Qatar already highly active in the LNG sector, the recent announcement by Dubai’s Techno Park and Dubai Multi Commodities Centre (DMCC) that it is working with LNG Impel to develop a massive liquefied natural gas (LNG) storage facility in the Emirate signals the beginning of a new phase of dynamic growth in the region’s LNG sector.

“This project highlights Dubai’s determination to become the energy hub of the Middle East,” said Sarah Woodbridge, Group Director Exhibitions, IIR Middle East - organisers of the Middle East Electricity Exhibition, which offers a unique, specific focus on the gas sector. “It also clearly demonstrates the potential for alternative fuel sources, which are in great demand right across the Middle East and North Africa.”

The first of its kind anywhere in the world, Dubai’s LNG Storage Hub, which will be located at Techno Park in Dubai, is expected to have a total storage capacity ranging from 40 to 65 billion cubic feet (bcf), and will offer customers the ability to store, trade and plan supplies of LNG, in addition to providing services such as LNG loans and quality blending.

“Techno Park, with a central focus on oil, gas, energy, alternative energy and water desalination, is a highly exciting development for the region,” added Woodbridge. “The Government of Dubai has firmly put its weight behind the successful implementation of innovative projects, aiming to greatly enhance and strengthen Dubai’s role in regional energy distribution.”

Dubai is ideally positioned to host this storage facility due to its strategic central location between the natural gas rich supply area of the Middle East and demand driven global markets. Furthermore, the Emirate’s business environment is highly advanced, as are its communication and travel infrastructures.

“The latest statistics suggest that the share of gas utilised in the Arab energy market will rise to 53.3% by 2015, overtaking oil, which will decline to 42.8% over the same period,” added Woodbridge. “The Middle East, including Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the UAE, has incredible reserves of natural gas - an overall total of 42% of the world’s proven gas reserves. Iran, Qatar, Saudi Arabia and the UAE have the world’s second, third, fourth and fifth largest natural gas reserves, and it is estimated that the UAE’s will last for up to 170 years.”

The increased domestic consumption of electricity across the region as a whole, linked to ever growing demand for domestic hydrocarbons for power generation, petrochemicals and desalination are the driving forces behind the increased usage of natural gas - Saudi Arabia has prioritised increased natural gas production, aiming to triple its output to 15 billion cubic feet a day by 2009. Growth in the domestic gas sector is also taking place in the domestic market, and in Abu Dhabi, consumption has doubled over the last decade to over 4 billion cubic feet a day.

Globally acknowledged as one of the world’s most important showcases for the global energy industry, Middle East Electricity takes place at Dubai’s International Exhibition Centre from February 11-14, 2007. The show, which attracts the region’s key decision makers, comprehensively covers the entire energy industry, including Gas, Power Generation, New & Renewable Energy, Water and Lighting, and is internationally recognised as the power behind the Middle East energy industry.