ADNOC's Ghasha gas project will support UAE's Ras Al Khaimah economic recovery: S&P Global Ratings

Dubai — Abu Dhabi National Oil Co.'s giant Ghasha ultra sour natural gas project will support economic recovery in the UAE emirate of Ras Al Khamaih (RAK) where rock from the world's largest quarrying company will be sourced to build artificial islands offshore of Abu Dhabi, according to S&P Global Ratings.

RAK's economic growth will be 3% this year after a 5% contraction in 2020, S&P Global Ratings said in an April 26 report. Stevin Rock, the largest quarrying company in the world and 100% owned by the RAK government, will supply the rock to build artificial islands for ADNOC's Ghasha gas project, which will develop, drill, and produce gas from the Ghasha offshore concession, it said. By comparison, real GDP for Abu Dhabi, which holds the majority of the UAE's energy assets, will be a negative 0.5% this year after a 7.5% contraction last year, according to S&P Global Ratings. But RAK's nominal GDP is $11 billion, compared with Abu Dhabi's almost $229 billion.

Ghasha is the world's largest offshore sour gas development, and is expected to produce more than 1.5 Bcf/d of gas for power generation to more than 2 million UAE homes by around the middle of the decade, according to ADNOC. To date, the concession has attracted foreign direct investment from Italy's ENI (25%), Germany's Wintershall Dea (10%), Austria's OMV (5%), and Russia's Lukoil (5%).

Ten artificial islands are being built and will eliminate the need to dredge over 100 locations for wells and will provide habitats for marine life, according to ADNOC's website. Four artificial islands were built for the Upper Zakum expansion project, the world's second-largest offshore oil field, it noted.

RAK will also benefit from the UAE's plans to build a national rail network, providing an alternative to truck transport, S&P Global Ratings said in the April 26 report. Etihad Rail, which is developing the national network, signed an agreement in April with Stevin Rock to lay down rails from RAK to Abu Dhabi and will transport an estimated 3.5 million mt of raw construction materials from Stevin Rock's Al Ghail quarry in RAK to Abu Dhabi, according to the report. "This will take 500 annual train trips, decreasing the number of truck trips required by 100,000 and thereby reducing the environmental impact of trade between the emirates," S&P Global Ratings said.