Quartet of Shippers Invest in UAE Gas Project

By Damon Evans

Abu Dhabi National Oil Company’s (ADNOC) Ruwais liquified natural gas project, the MENA region’s first LNG export facility powered by clean energy, is the latest world-scale LNG project slated to come online in the coming years to meet rising demand for the low-emission transition fuel.

From Issue 5, 2024 of Breakbulk Magazine

(5-minute read)


In July, a quartet of shippers announced their investment in a major UAE gas project led by Abu Dhabi National Oil Company (ADNOC). Shell, TotalEnergies, BP, and Mitsui each took a 10% stake in the Ruwais liquified natural gas (LNG) project, attracted by its climate-friendly credentials. The move underscores a new trend toward lower emissions gas developments, with more projects expected to proceed soon.

Significantly, the LNG export terminal in the industrial city of Ruwais in Abu Dhabi is set to be the first facility in the Middle East and Africa (MENA) region to run on clean power, making it one of the lowest-carbon-intensity LNG developments in the world.

“The project will be fully electric and powered by nuclear and solar energy sources,” said Sean Harrison, an analyst at energy research company Wood Mackenzie, following news of the new partners in Ruwais LNG. “This will reduce the project’s emissions, making exports into markets with stringent emission regulations more appealing and will help align with the international oil companies’ (IOCs') strategies for reducing emissions.”

Due to start commercial operations in 2028, the facility will leverage AI and the latest technologies to enhance safety, minimize emissions and drive efficiency, said ADNOC, which operates the project with a 60% share. The LNG project consists of two 4.8 million tonnes per year (t/y) processing trains with a total output of 9.6 million t/y, which will nearly triple the UAE’s existing LNG production capacity.

The state-backed oil and gas company announced its final investment decision (FID) to build the export project in June. That month it also awarded a $5.5 billion engineering, procurement, and construction (EPC) contract to a joint venture led by Technip Energies and also including Japan’s JGC and the UAE’s NMDC Energy.

Technip Energies is managing the construction of the plant, including logistics scope. Breakbulk understands that Fadoua Jabra, project transport manager at Technip Energies, is leading the logistics.

Besides the EPC deal, ADNOC Gas, the gas and LNG division of ADNOC, last October awarded U.S. energy services company Baker Hughes a contract to provide two electric liquefaction systems (e-LNG) for the Ruwais complex.


New Climate-Friendly Equipment

The new LNG production trains will be driven by Baker Hughes’ 75-megawatt BRUSH electric motors and feature the company’s compressor technology, making Ruwais LNG one of the first all-electric LNG projects in the Middle East. Compressors are essential for cooling natural gas to about -162 degrees Celsius and transforming it into a liquid state for shipping.

An e-LNG facility uses large electric motors to drive the refrigerant compressors instead of gas turbines, or other mechanical drives. E-LNG systems offer the opportunity to generate power from several sources, including renewable energy or nuclear. This helps either reduce or eliminate greenhouse gas (GHG) emissions. Their use reflects the broader industry trend toward electrification and sustainability in industrial applications.

Moreover, these new compressors, powered by electric motors, are typically smaller and more compact than gas turbines or mechanical drive systems used in traditional compressors. The absence of a large gas turbine, which tends to be bulkier due to its size and associated equipment like fuel systems, exhaust systems and cooling systems, reduces the overall footprint of the compressor system.

Instead, E-drive systems need electrical components like transformers, inverters and control systems, which can add to the overall size, but they are usually more space-efficient than the equivalent mechanical components in gas-driven systems.


Lower-Emission LNG Projects

Lower emissions projects, such as Ruwais LNG, will be vital for LNG to prosper in a low-carbon world, according to energy research company Wood Mackenzie. Consequently, new LNG projects plan to deploy electric motors to drive the compressors that liquefy the gas, rather than gas-to-power turbines.

TotalEnergies is planning to use electric liquefaction trains at its proposed Papua LNG project in Papua New Guinea (PNG), which is targeting FID in 2025. Technip Energies and Clough have been carrying out the front-end engineering and design (FEED) work for the three-train development. Papua LNG will be built within the existing PNG LNG complex, operated by ExxonMobil in Caution Bay.

Indeed, demand for more LNG producing projects is rising, especially as natural gas is increasingly viewed as a key energy transition fuel. As a component in the energy transition, LNG can decrease carbon emissions in processes where it displaces coal, which has a large carbon footprint. Crucially, LNG can easily be shipped to regions where a lack of native natural gas resources hinders the scaling back of coal usage.

The LNG market is predicted to be well-supplied over the next five years, thanks to new projects coming online during this period, according to energy consultancy Rystad Energy. However, “starting in 2030, there will be a supply gap as demand for LNG continues to grow. To address this, new projects need to reach final investment decisions (FID) within the next one to three years,” Sindre Knutsson, partner, gas & LNG research, at Rystad Energy told Breakbulk.

“By 2032, up to 50 million tonnes of new (currently non-FID) LNG projects will be necessary. Depending on the size of these projects, this may translate to around ten or more projects reaching FID to fill the gap. Key regions for development will include the U.S., Qatar and Western Africa, with additional opportunities in the Americas – such as Argentina, Mexico, and Canada – as well as in Southeast Asia,” added Knutsson.


Investment Decisions

Meanwhile, there has been a spate of FIDs recently, said Fraser Carson, principal analyst, global LNG at Wood Mackenzie. “There have been three FID announcements so far this year, representing just over 13 t/y of sanctioned capacity. In mid-June, ADNOC greenlit its 9.6 million t/y Ruwais LNG project. Later that month, the Haisla Nation and Pembina formally sanctioned the 3.3 million t/y Cedar LNG project, Canada’s first floating LNG (FLNG) export facility.

“Also in June, Malaysia’s Genting signed a US$1 billion engineering, procurement, construction, installation, and commissioning (EPCIC) contract with Wison New Energies to construct a 1.2 million t/y FLNG facility for a project in Indonesia,” Carson said.

Wison New Energies, based in China, will build the FLNG facility at its shipyards in Nantong and ZhouShan. Following the successful yard performance test, the FLNG unit is due to be transported to Teluk Bintuni, West Papua, Indonesia, during the second quarter of 2026, for final commissioning.

Looking forward, Wood Mackenzie sees potential for up to 80 million t/y of new LNG export developments to be sanctioned over the next two to three years. Carson added: “There are several U.S. LNG projects that are well placed to make a positive FID announcement, despite the impact of the pause on Non-Free Trade Agreement (FTA) approvals. We could see a U.S. project sanctioned by the end of this year.

“Securing financing and EPC contracts, and continuing marketing momentum, are the key next steps for these projects. Outside the U.S., we see good FID potential for projects in Mexico, Qatar, Papua New Guinea and Mozambique. In PNG and Mozambique, project partners will be focused on completing FEED and awarding EPC contracts. In Qatar, FID timing will depend on project cost estimates and marketing.”


ADNOC, Shell, TotalEnergies, BP, Mitsui, Technip Energies, JGC, Baker Hughes and ExxonMobil are members of the Breakbulk Global Shipper Network, a worldwide network of companies and executives involved in the engineering, manufacturing and production of project cargo. The next in-person meet-up for BGSN members will be at Breakbulk Americas 2024 on 15-17 October in Houston. 

PHOTO CREDIT: ADNOC