A new lifecycle in Abu Dhabi

Abu Dhabi

Creative product development and specialised equipment is at the forefront of production in Abu Dhabi. TOGY spoke with John Lynch, the Regional Director of AEG Power Solutions, about Abu Dhabi’s ambitious production targets and the change in demand for electrical products in the oil and gas industry as the country’s assets age.

What trends have you observed in Abu Dhabi’s oil and gas industry?
One of the biggest developments in recent years is the push from Abu Dhabi National Oil Company to develop fields in more and more challenging environments, for example Al Hosn Gas was founded in 2010 with a mandate to explore and develop the Shah Gas field. Without adequate technology, marginal and challenging fields had remained undeveloped, but now Abu Dhabi National Oil Company is developing new fields as the available technology to develop such assets became economical.
As oil and gas companies are developing very difficult environmental and geophysical areas, they are placing new demands on their equipment. For example, Al Hosn Gas hit its production plateau of 1 bcf (28 mcm) of gas per day in the second half of 2015, producing from the Shah gasfield, which has exceptionally high hydrogen sulphide content. The sour gasfields in Abu Dhabi will require specialist equipment to cope with the hydrogen sulphide in the reservoir and atmosphere above ground.
In the Middle East, and Abu Dhabi in particular, expectations about field lifecycles are shifting as well. Previously, large and highly productive fields could be expected to produce for five to eight years, but in the past few years operators drill wells that are expected to produce for six to eight months. Given these evolving production patterns, equipment is now expected to be robust and easily transported to the next well creating a new strain on oilfield equipment.

How has rising power demand affected investment in Abu Dhabi’s oil and gas industry?
In Abu Dhabi investment in the hydrocarbons industry is continuing, particularly in gas assets. Most of the UAE’s power generation needs are still supplied by gas-fired power stations, and the government is interested to explore all its options before importing additional gas from abroad. One option is to develop domestic assets. As the country’s energy requirements continue to rise, demand for power and substation equipment, as well as gas, in the UAE will continue.
In Abu Dhabi, along with Saudi Arabia and into Jordan, the governments are interested in developing nuclear power generation facilities to liberalise additional natural gas for other uses, primarily for monetisation and eventual export or to sustaining the emirate’s oil production through enhanced oil recovery.

How can innovation be introduced in the oil and gas industry?
Endless innovation is possible, but ultimately, acceptance of new techniques is hard to achieve. Typically, oil and gas companies will request a case history example where the new technology has been installed in a similar environment and performed successfully. How do you get that experience when introducing a new technology without someone taking a leap first?
The best way to introduce innovation is through dialogue and collaboration with a client facing a particular challenge. One must find the application and the customer, develop something with them and for them, and then use that not as a trial, but as a sample site.

How has the original equipment manufacturers industry changed with time in Abu Dhabi?
After sales support for original equipment suppliers are becoming more localised. During the rapid industrialisation of Abu Dhabi from the 1970s, when many of the projects were greenfield, not much after sales technical support was required and it was typically outsourced to Europe. As facilities age, the requirements of the owners are shifting. As assets in Abu Dhabi are entering the final stages of their design life, many companies will either attempt to extend the life of their equipment or replace it. Local demand for technical support is fuelling growth in that segment.

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