- UAE Gas Supply Project involves the ownership, transportation, processing, distribution, marketing and sale of natural gas and petroleum products.
- Crescent Petroleum is a gas resource owner and has rights to existing and future gas supplies, including a supply of gas underpinned by a 25 year agreement with National Iranian Oil Company (NIOC). NIOC is the second largest gas resource holder in the world. Total investment by NIOC to develop the gas reserves and install the infrastructure to-date is in excess of US$ 1.5 billion.
- Crescent Petroleum through its affiliates has secured long-term agreements for the sale of gas with ultimate end-users in the UAE.
- US $300 Million investment in the gas sweetening plant and the transmission facilities, which are owned by SajGas and UGTC respectively, both wholly owned subsidiaries of Dana Gas PJSC.
- Gas deliveries by NIOC were expected to commence in 2008, however, due to further technical issues, the completion of the Iranian facilities to produce and transport the gas to CNGC was delayed and is now expected to start up in the 2nd half of 2010.
- Crescent Petroleum has been instrumental in establishing Dana Gas PJSC, which is an Abu Dhabi listed public joint stock company with an issued share capital of AED 6 billion. Crescent Petroleum is the largest shareholder in Dana Gas.
Crescent Petroleum has historically been pivotal in putting in place the necessary arrangements to facilitate the development and expansion of the gas market in the UAE. Crescent Petroleum and its management have pioneered commercial inter-Emirate gas supply and sales arrangements in the United Arab Emirates, based on gas supplies from Sharjah. Crescent Petroleum’s management concluded the first inter-Emirate onshore gas supply contract from Sharjah for the UAE Federal Ministry of Electricity and Water in 1985, and then in 1986 another contract between the Emirates of Dubai and Sharjah. Subsequently, in 1991, Crescent Petroleum concluded the first offshore inter-Emirate gas sales and purchase agreement through a dedicated pipeline (on a build, own and operate basis) from its offshore Mubarek Facilities to Jebel Ali, Dubai.
Crescent Petroleum has extensive in-house technical skills and operating experience of managing and implementing gas development projects, and is well established in the region to continue to play a key role in the further development of the burgeoning gas market. Crescent Petroleum is thus ideally placed, as supplier, transporter and marketer of gas, to play a significant role in consolidation and expansion of the gas market in the United Arab Emirates, and the wider region, in order to service end-users in electricity and water as well as other industrial sectors.
Crescent Petroleum and its affiliates plan to continue their expansion and participation in the downstream gas and related industrial sectors in order to extract maximum value from the gas chain.
Gas demand
The demand in the Northern Emirates gas market has steadily risen year by year, driven by the growth and urbanization of the Dubai and Sharjah Emirates. The primary use for gas is electrical power generation and water desalination, although gas-related industries are also becoming increasingly significant users. The growth in the gas market over the last ten years has averaged around 10% per annum, and is forecast to continue at such high growth rates for the medium term at least. The indigenous gas fields that were discovered and developed in the 1980’s are declining and can no longer meet the increasing gas demand.
Crescent Petroleum gas supplies
Crescent Petroleum developed its deep (14,000 ft.) offshore gas reservoir in the late 1980’s with the drilling of the Thamama reservoir in the Mubarek Field and the installation of remote unmanned well head platforms. A purpose-built central gas processing facility was installed in the early 1990’s, and gas export to Jebel Ali via the 92 km offshore pipeline was constructed by Crescent Petroleum and commenced operation at that time.
SCHEMATIC OF CRESCENT PETROLEUM GAS PROJECT
The supply of gas by pipeline from the vast resources of neighbouring countries is the obvious and most competitive external gas source from which to satisfy the rising local demand within the UAE. Crescent Petroleum formed a gas marketing company, Crescent National Gas Corporation (CNGC) to meet the increasing Northern Emirates gas demand and oversee the merchant operations. Crescent Petroleum owns 65% of CNGC with the balance held by Dana Gas PJSC.CNGC’s operations involve:
- Transmission of sour gas, under a long term agreement with United Gas Transmissions Company(UGTC), a wholly owned subsidiary of Dana Gas PJSC. UGTC owns a 52 km, 30” diameter subsea pipeline from a Riser Platform (adjacent to Crescent Petroleum’s existing offshore facilities) to landfall at Hamriyah, Sharjah and a 30 km, 30” diameter onshore buried pipeline from Hamriyah to Saja’a.
- Sweetening of the sour gas under a long term agreement with Sajaa Gas Private Limited Company (SajGas), a wholly owned subsidiary of Dana Gas PJSC. SajGas owns a sweetening plant which has an initial design capacity of 600 million cubic feet of gas per day.
- Processing of the sweetened rich gas to denude and extract propane, butane and condensate products utilizing an existing LPG plant at Sajaa.
- Sale of end-user quality gas under long term gas sales agreements to existing major governmental water and power utilities (which include FEWA and SEWA), and marketing and sales of gas to new industries that are being established at Hamriyah Free Zone.
- Marketing and sale of LPGs.
- Marketing and sale of extracted condensate using existing condensate storage and loading facilities located at Hamriyah, Sharjah.
- Marketing and sale of sulphur to regional markets.
- Transportation of sulphur under a long term agreement with Gulftainer Limited of Sharjah, in liquid and pastille form, to the Hamriyah Port from the gas processing plants.