The United Arab Emirates' Ras al-Khaimah emirate is still hoping for gas supplies from Iran despite political pressure not to deal with its northern neighbour and a lack of progress on talks, an official said today.
The US has put pressure on companies to stay away from deals with Iran, accusing Tehran of using nuclear enrichment plans as a cover for developing atomic weapons. Iran says it only wants energy for civil use.
Talks between the emirate of Ras al-Khaimah and Iran and Oman have been ongoing for years over gas from the West Bukha-Hengam offshore gas field.
Iran and Oman share the field, but Ras al-Khaimah has a pipeline from Oman's nearby Bukha field to import gas. It hopes to extend the pipeline to receive gas from any deal between Oman and Iran to carve up West Bukha/Hengam.
"It would be the easiest thing to drill on the Iranian side and pipe the gas through to Ras al-Khaimah," Ruurd Abma, chief operating officer for the government-owned Ras al-Khaimah Gas Company (Rakgas), told Reuters.
"Talks are still at a preliminary stage. There are political considerations and the terms of oil and gas deals with Iran aren't so attractive," he told reporters on the sidelines of an energy conference.
Government-owned RAK Petroleum is heading the talks with Iran and Oman, in which Rakgas is also participating, Abma said.
Ras al-Khaimah receives 30 million cubic feet per day of natural gas from the Bukha field, which it hopes to boost to 40 MMcfd soon through wells drilled by RAK Petroleum on Oman's side of the West Bukha field, Abma said.
RAK Petroleum will start building a pipeline to link West Bukha and Bukha in May, he added.
Gas demand in the emirate is over 300 MMcfd and supply meets just over a tenth of that.
Ras al-Khaimah is analysing other ways to meet its energy demand, and considering options such as an import facility for liquefied natural gas or coal-fired power plants.
Rakgas is also exploring for gas in eastern Tanzania.
Gas supply will improve in April, when the emirate will receive another 80 MMcfd from the offshore fields of neighbouring emirate Umm al-Quwain, Abma said. That was a few months later than the previously planned 1 January start date.
China's Sinochem subsidiary Atlantis is developing the offshore fields and laying a 75 kilometre pipeline into Ras al-Khaimah to deliver the gas.
Rakgas also has a contract to take delivery of around 100 MMcfd from Dana Gas in the neighbouring emirate of Sharjah.
That deal is for a share of gas to be distributed by Dana under an import contract with Crescent Petroleum from an offshore Iranian oilfield.
The imports have been delayed by over a year and a half as Iran has yet to complete building the facilities to pump the gas to the UAE. Iran and Crescent have also been involved in a long dispute over the gas price of the deal.
© Upstream 2008
