Abu Dhabi: Ras Al Khaimah is still hoping for gas supplies from Iran despite political pressure not to deal with its northern neighbour and a lack of progress on talks, an official said on Tuesday.
The United States has put pressure on companies to stay away from deals with Iran, accusing Tehran of using nuclear enrichment plans as a cover for developing atomic weapons. Iran says it only wants energy for civil use.
Talks between Ras Al Khaimah and Iran and Oman have been ongoing for years over gas from the West Bukha/Hengam offshore gas field.
Iran and Oman share the field, but Ras Al Khaimah has a pipeline from Oman's nearby Bukha field to import gas. It hopes to extend the pipeline to receive gas from any deal between Oman and Iran to carve up West Bukha/Hengam.
"It would be the easiest thing to drill on the Iranian side and pipe the gas through to Ras Al Khaimah," said Ruurd Abma, chief operating officer for the government-owned Ras al-Khaimah Gas Company (Rakgas).
"Talks are still at a preliminary stage. There are political considerations and the terms of oil and gas deals with Iran aren't so attractive," he said on the sidelines of an energy conference.
Government-owned RAK Petroleum is heading the talks with Iran and Oman, in which Rakgas is also participating, Abma said.
Ras Al Khaimah receives 30 million cubic feet per day (cfd) of natural gas from the Bukha field, which it hopes to boost to 40 million cfd soon through wells drilled by RAK Petroleum on Oman's side of the West Bukha field, Abma said. RAK Petroleum will start building a pipeline to link West Bukha and Bukha in May, he added.
Gas demand in the emirate is over 300 million cfd and supply meets just over a tenth of that. Buyers such as cement manufacturers have had to use diesel and other oil products to substitute for gas, Abma said.
Ras Al Khaimah is analysing other ways to meet its energy demand, and considering options such as an import facility for liquefied natural gas or coal-fired power plants.
Rakgas is also exploring for gas in eastern Tanzania.
Gas supply will improve in April, when the emirate will receive another 80 million cfd from the offshore fields of Umm Al Quwain, Abma said.