Pipeline magazine spoke to Ali Al-Janabi, Shell vice president for Abu Dhabi, who describes the company’s long history and future in the region.
You have responsibility for Shell’s business in Abu Dhabi - can you describe that business?
We have been present in the Middle East for more than 100 years. We’ve been present in Abu Dhabi since the late 1930s with Shell having had a 9.5 per cent shareholding in the Abu Dhabi Company for Onshore Oil Operation (ADCO) for seven decades. Shell also has a 15 per cent shareholding in Abu Dhabi Gas Industries Limited (GASCO). We have pro-actively supported ADNOC since 2001 to establish the Petroleum Institute (PI) and holds sessions by its senior technical experts at the PI. Shell also helped in establishing PI’s Gas Research Centre.
What are the challenges? What happened at the Bab sour gas project?
Shell is keen to continue its long co-operation and partnership with Abu Dhabi and the ADNOC Group of companies, building on our strong technology base and our detailed knowledge of the onshore oil fields.
Following careful, thorough evaluation of technical challenges and costs, Shell decided to exit the joint development of the Bab sour gas reservoirs with ADNOC in the emirate of Abu Dhabi, and to stop further joint work on the project. The evaluation concluded that for Shell, the development of the project does not fit with the company’s strategy, particularly in the economic climate prevailing in the energy industry.
Is Shell moving more towards the gas business, specifically LNG?
Across the Middle East and North Africa there is a consensus that the key priority must be creating greater levels of economic growth. Its recognised economic growth is essential to deliver the millions of new jobs which are central to maintaining social stability.
With a growing population in the Middle East and North Africa, implications on urban swelling, energy demand and consumption are tremendous.
An immediate solution to addressing the energy gap is LNG. It can be quick, competitively priced and flexible; offering energy security through diversification and multiple sources. The combination of LNG and indigenous gas can play a central role in powering the economic growth and creating the new jobs the region needs. It is extremely gratifying to see the potential of LNG clearly recognised in the region with many regional players incorporating LNG in their energy mix. Dubai and Kuwait led the way of developing LNG import terminals; Jordan and Egypt followed by developing and operating their regas terminals.
The benefits of developing a regas project are undeniable: Floating LNG regas options can be developed quickly (12-30 months) and can be designed to be redeployed if no longer required. LNG import provides flexibility to meet summer peak power and water demand. LNG import provides security of supply by accessing a range of global LNG providers from the MENA region, Australia, Russia and many more. LNG regas facilities provide extra capacity in a mature gas system. LNG is always attractively priced relative to international liquid fuels as it is priced at a discount to liquids.
We see an estimated 430 million tonnes of global LNG demand by 2025. LNG for transport could possibly add 5-10 per cent to our base case global LNG demand estimates by 2025. That is about 25 to 45 million tons per year by 2025. (Wood Mackenzie had estimated 40-60 million tons by 2030).
What did Shell show at ADIPEC?
The Shell stand showcased its virtual reality technology in two forms. The first is through Miraah, one of the world’s largest solar plants and one of our joint venture partner, Petroleum Development Oman’s project which utilises GlassPoint’s solar Enhanced Oil Recovery technology. Secondly, our Virtual Reality technology is featured through integrated subsurface and wells software on our stand. Furthermore, the students who participate in Emirates Foundation’s Think Science programme are displaying their innovations.
What do you hope your legacy in running Shell’s Abu Dhabi business might be?
I’d like to have more secondment opportunities for ADNOC staff in Shell in any given period. In order to do this, we’d need to have the material scale of business through operations, so that we’re able to take people out of the business and bring them into Shell, then re-enter them back into their respective companies as part of a structured career development ladder. This will help us to build upon our 77 year history of Shell in the UAE.
This interview first appeared in Pipeline magazine's December issue.