(Bloomberg) – The United Arab Emirates, long one of OPEC’s key oil producers, is pivoting to U.S.-tested fracing techniques to tap its “very promising” unconventional gas resources, with the intention of ramping up output amid forecasts for surging demand.
Abu Dhabi National Oil Co. is tapping new sources of natural gas in its deserts and coastal waters to meet local demand and supply an export terminal that’s under construction. The company is benefiting from lessons the industry has learned developing hydraulic fracturing, or fracing, in U.S. shale fields, said Musabbeh Al Kaabi, chief executive for upstream.
“We are making a remarkable progress with the unconventional resources,” Al Kaabi said in an interview at the Adipec conference in Abu Dhabi. “The results we see so far are very promising, in some areas exceeding what we see in the U.S.”
The UAE and other Middle Eastern states are ramping up gas projects, seeing the fuel as a key source of energy for the power-hungry data center boom. In addition to building the multibillion-dollar Ruwais liquefied natural gas project, ADNOC has stakes in export facilities in the U.S. and Africa. Ruwais will add 9.6 million tons of annual gas export capacity, more than doubling ADNOC's production capability.
“The story of the unconventionals in the U.S. inspired a lot of people around the world,” Al Kaabi said. “The lessons learned, the technology deployment, the capabilities developed in the U.S. and other places put us in a very strong position to capitalize on these capabilities and deliver a successful story.”
The shale revolution has transformed energy production in the U.S., turning it from one of the world’s biggest importers of oil and gas to a major exporter. Yet other countries have struggled to replicate the success for a variety of issues — access to water for fracing, local opposition to drilling activity, challenging geology.
The UAE is working with Houston-based EOG Resources Inc. to develop its oil and gas reserves. France’s TotalEnergies SE and Malaysia’s Petroliam Nasional Bhd (Petronas) also operate in the country.
The UAE aims to be self-sufficient in gas supply by the end of this decade, leaving excess volumes for export. ADNOC is also building up its LNG trading as producers such as the U.S. ramp up export capacity to supply regions like Asia, where demand is set to grow for decades. The company’s international investment unit is targeting supplies globally, including a deal announced this week to potentially join a project in Argentina.
The Abu Dhabi firm is now trading three times more LNG than the company produces itself, Ahmed Bin Thalith, the head of ADNOC Global Trading, said in an interview on Wednesday.