Abu Dhabi plans to build a terminal for importing liquefied natural gas at a port that would avoid the need for vessels to pass through the Strait of Hormuz, four people with knowledge of the situation said. Mubadala Development Co. and International Petroleum Investment Co., both funds run by the government of Abu Dhabi, will set up the plant in Fujairah, another of the United Arab Emirates’ seven sheikhdoms, said the people, who declined to be identified because the project hasn’t been announced publicly. Mubadala didn’t respond to messages left on the mobile phones of two press officials. IPIC didn’t respond to an e- mailed request for comment.
The offshore LNG terminal, which is designed to float, would receive its first imports in 2014, one of the people said. Chilled liquid fuel, once turned back to gas, would then be sent to industrial sites in the U.A.E., the people said.
Iran threatened earlier this year to close the Strait, at the mouth of the Persian Gulf, in response to sanctions that the U.S. and Europe are imposing because of the Islamic republic’s nuclear program. Fujairah’s coastline is on the Gulf of Oman, which empties into the Indian Ocean.
Middle Eastern oil producers such as Saudi Arabia, the world’s largest crude exporter, and the U.A.E., the fifth- biggest oil producer in OPEC, want additional gas supplies to make electricity and petrochemicals and as fuel for energy- intensive industries such as smelters. Aside from Qatar and Iran, these nations have limited gas reserves of their own.
The U.A.E., holder of about 7 percent of global oil reserves, already imports gas from Qatar through the Dolphin Gas pipeline, a venture with Total SA (FP) and Occidental Petroleum Corp. The pipeline operates at about two-thirds of capacity because the U.A.E. has been unable to buy additional fuel from Qatar, which has committed its available supplies to other buyers.
LNG is gas that’s chilled to liquid form so it can be shipped by tankers over distances not served by pipelines. Upon arrival, the LNG is converted back into gas for local distribution. The Strait of Hormuz is a maritime chokepoint through which about one fifth of the world’s traded oil passes.
