Emirates LNG to replace FSRU by land-based terminal
The Abu Dhabi-based companies Mubadala Petroleum (Mubadala) and the International Petroleum Investment Company (IPIC) have decided to stop the just starting first phase of the Emirates LNG project in Fujairah, United Arab Emirates (UAE), to rethink the whole concept of this liquefied natural gas (LNG) import and regasification terminal.
– Phase-1: Floating storage and regasfication unit (FSRU)
– Phase-2: Landed-base regasification and storage terminal
To deliver the FSRU corresponding to this first phase, Excelerate had planned to allocate one of the eight units currently in construction at the Daewoo Shipbuilding and Marine Engineering (DSME) shipyard in South Korea.
This concentration of interests coming from Abu Dhabi into a Fujairah project is motivated by the reliance of the Abu Dhabi Emirates economy on the Strait of Hormuz.
With Fujairah giving direct access to the Gulf of Oman and thus to the Indian Ocean without depending from the Strait of Hormuz, Abu Dhabi secures its export of crude oil but also its import of natural gas.
Mubadala and IPIC to retender Emirates LNG in 2014
Abu Dhabi is importing gas from Qatar and needs alternative source of supply to feed its power generation and water desalination facilities and continue to boost its oil production and petrochemical sector.
Because of the increasing threat on the Strait of Hormuz through the tension with Iran, Abu Dhabi had decided to develop its Emirates LNG project on fast track.
In the recent context where the USA resume discussions with Iran in the perspective of relaxing tensions in the Gulf, Abu Dhabi may have considered that the degree of urgency that has led to design and build the Emirates LNG project in two phases including the FSRU was not longer so relevant.