Abu Dhabi: Suhail Mohammad Al Mazroui, Minister of Energy, on Monday said the UAE Government is dedicated to increasing gas production and will produce 3.5 million barrels per day of oil by 2017.

“In a time of unstable oil prices, we remain dedicated to reaching our long-term production goals and our investments will remain there,” Al Mazroui said.

“We will use this production output that we are building to continue our journey in stabilising the market. However, we are also pursuing the strategy of increasing the availability of natural gas within the UAE. In Abu Dhabi, we are witnessing the start of production from one of the large scale sour gas developments at the Shah gas field.”

The Shah gas project which, started operations this week, is expected to reach full capacity by year end, Al Mazroui said.

The cost of the project is $10 billion. It is being developed by Abu Dhabi Gas Development Company Ltd (Al Hosn Gas) in cooperation with US-based energy company Occidental Petroleum.

“This development will unlock the possibilities of extracting sour gas and leads to further development in the region. It will account for five percent of global sulphur production,” he said.

The Shah gas field will be complemented by the development of another project — Bab gas development.

“We expect to see a significant shift in the supply dynamics of gas in the country in the next 10 years. We are also preparing to increase our LNG [Liquefied Natural Gas] import capacity. The Emirates LNG Storage and Regasification terminal in Fujairah is expected to have nine million tonnes of import capacity,” he said.

Al Mazroui added that with the increasing in demand of natural gas and increase in gas prices, the UAE has decided to diversify the sources of power generation to nuclear and renewable energy to reduce the future import of gas volumes. “We will embrace a new energy equation once the nuclear reactors get commissioned by 2020.”

Speaking at an event, Abdullah Nasser Al Suwaidi, Chief Executive of Abu Dhabi National Oil Company (Adnoc), said the Shah sour gas project has started two days ago.

“We look forward to reaching full capacity this year,” he said.

The processed sulphur granules from sour gas will be transported on a purpose-built 266km railway line to the Ruwais port terminal for export.

The gas field is located about 210km south-west of Abu Dhabi.