Gas Strategy Overview
Despite holding the world’s seventh-largest proven natural gas reserves at approximately 6.1 trillion cubic meters, the UAE has historically been a net gas importer. Rapid domestic demand growth for power generation, desalination, and industrial feedstock outpaced production capacity, necessitating pipeline imports from Qatar via the Dolphin pipeline since 2007.
Achieving gas self-sufficiency has become a strategic priority, driven by both energy security considerations and the economic logic of monetizing domestic reserves rather than paying import premiums. ADNOC’s upstream investment program has centered sour gas development as the primary vehicle for closing the supply gap.
Supply-Demand Balance
| Metric | 2020 | 2022 | 2024 | 2025 (est.) | 2028 (proj.) |
|---|---|---|---|---|---|
| Domestic Production (bcm) | 56.2 | 58.8 | 64.5 | 68.0 | 78.0 |
| Dolphin Imports (bcm) | 19.8 | 20.1 | 19.5 | 18.0 | 14.0 |
| LNG Imports (bcm) | 2.4 | 1.8 | 1.2 | 0.8 | 0.0 |
| Total Supply (bcm) | 78.4 | 80.7 | 85.2 | 86.8 | 92.0 |
| Domestic Demand (bcm) | 76.5 | 79.2 | 83.0 | 85.0 | 90.0 |
| Net Position (bcm) | +1.9 | +1.5 | +2.2 | +1.8 | +2.0 |
The UAE has maintained a narrow surplus by combining domestic production growth with demand-side management in the power sector. Nuclear and solar capacity additions have materially reduced gas consumption for electricity generation, freeing molecules for industrial use and future export.
Sour Gas Development
The UAE’s remaining undeveloped gas reserves are predominantly sour – containing high concentrations of hydrogen sulfide (H2S) and carbon dioxide (CO2) that require specialized processing. ADNOC’s flagship sour gas projects include:
Hail and Ghasha Offshore Complex
- Reserves: Estimated 1.5 trillion cubic feet of gas plus associated condensate
- Investment: $16.5 billion
- Partners: ADNOC (55%), Eni (25%), PTT (20%)
- Production Target: 1.5 billion cubic feet per day by 2027
- Features: Ultra-sour gas processing with integrated CCS, artificial islands for offshore drilling
Shah Gas Field
- Status: Operational since 2015
- Capacity: 1 billion cubic feet per day
- Operator: Al Hosn Gas (ADNOC 60%, Occidental 40%)
- Significance: First commercially developed ultra-sour gas field in the UAE; CO2 injected for enhanced oil recovery
Bab Integrated Gas Processing
- Expansion completed: 2024
- Capacity increase: Additional 500 million cubic feet per day
- Integration: Gas processing linked to ADNOC’s Habshan facilities and NGL extraction
Dolphin Pipeline Dynamics
The Dolphin pipeline delivers Qatari gas to the UAE at contracted volumes of approximately 2 billion cubic feet per day. The long-term supply agreement, extending through the early 2030s, provides baseload gas supply at prices linked to oil indexation with periodic renegotiation windows.
As domestic production scales, the strategic question is whether the UAE will reduce Dolphin offtake, renegotiate terms, or maintain imports while developing LNG export capacity to monetize the surplus. The Dolphin pipeline also supplies a smaller volume to Oman, embedding the infrastructure in a regional gas network.
LNG Developments
ADNOC’s Ruwais LNG project represents the UAE’s entry into the global LNG export market:
| Parameter | Detail |
|---|---|
| Location | Ruwais Industrial Complex, Abu Dhabi |
| Capacity | 9.6 MTPA (two trains) |
| Technology | Air Products C3MR liquefaction |
| FID | 2024 |
| First LNG | Expected 2028 |
| Carbon Intensity | Designed as lowest-emission LNG facility globally with CCS integration |
Ruwais LNG will transform the UAE from a marginal gas importer to an LNG exporter, providing direct access to premium Asian and European markets. The project’s low-carbon design – with electric-drive compressors powered by nuclear and solar electricity and CO2 capture – positions UAE LNG competitively in an era of increasing buyer preference for certified low-emission cargoes.
Outlook
The UAE’s gas strategy is approaching an inflection point. Sour gas production growth, combined with reduced gas demand for power generation, is expected to eliminate the need for LNG imports by 2027 and begin generating exportable surplus. The Ruwais LNG project will monetize this surplus, creating a new revenue stream that complements crude oil and refined product exports. The strategic challenge is managing the transition from gas scarcity to surplus without overinvesting in infrastructure ahead of the long-term shift toward hydrogen and electrification that the Net Zero 2050 commitment implies.