OBG talks to Saeed Khoory, CEO, Emirates National Oil Company

Interview: Saeed Khoory

With growth in the trade, aviation and real estate industries, what can be done to meet the resultant increases in domestic energy demand?

SAEED KHOORY: Energy-related infrastructure projects are highly capital-intensive by nature. Yet after the building boom of the past decade, Dubai is now more focused on improving the efficiency of existing facilities. The natural gas sector still presents a significant challenge for Dubai, so we are concentrating on optimising the cost of handling as well as adopting enhanced technology to minimise costs. Given the cyclical nature of the energy market, this is an important issue not only for Dubai but the entire GCC, due to the prevalence of government subsidy policies in member states. In Dubai for example, consumers have become increasingly conscientious of the costs of energy over time, and subsidy revisions have had a direct impact on consumption.

How can alternative fuels play a greater role in the commercial and industrial market?

KHOORY: The strong potential for alternative fuels in Dubai’s commercial sector falls under the framework of the Dubai Integrated Energy Strategy 2030. For example, Emirates Gas is leading the compressed natural gas (CNG) initiative to promote cleaner and greener fuels. The broader goal here is to provide a robust infrastructure for CNG refuelling, so that CNG can then be made available as a more sustainable fuel for the transportation sector. CNG vehicles will produce considerably fewer tailpipe emissions, and so should improve the city’s overall air quality.

Another ambitious programme currently under way involves converting gas that is currently being flared by Dubai Municipality from its sewage treatment plant and landfill sites into compressed bio gas (CBG). CBG will then be used as an alternative automotive fuel along with CNG. This initiative is the first of its kind and highlights the practical application of alternative fuels for large-scale use in Dubai.

How can oil and gas infrastructure be improved to spur investment in downstream energy?

KHOORY: Aviation is one of the fastest-growing industries in Dubai, and keeping pace with correlated increases in fuel demand has always been a major challenge for the emirate. The recent construction of a jet fuel pipeline and oil terminal in Jebel Ali will link tanker shipments directly to Dubai International Airport and the new Al Maktoum International Airport, and Jebel Ali will become the most important focus for energy-related investment in Dubai. Following the completion of the new oil terminal in 2013, a number of studies will be conducted to see how surrounding land can best be utilised.

Moreover, Dubai is also adapting its own storage facilities for surplus supply, which will be used as an emergency stockpile for the wider region, as well as for trading. Outside of Dubai, Fujairah is also becoming increasingly important to the UAE's energy sector as a whole. Discussions over the construction of a second independent crude terminal in Fujairah are currently underway. If this project goes ahead, Fujairah’s position as a major player in the global bunkering and oil storage market will be assured.

What challenges exist in fostering greater cooperation within the GCC on sustainable energy initiatives, and how can they be overcome?

KHOORY: There is plenty of room for improvement within the GCC on green initiatives. Each member state currently has their own internal strategy, but a regional plan with longer continuity would produce a larger knowledge base from which to test applications of the most viable sustainable technologies. Greater cooperation would lead to scalable ideas that could be rolled out across the GCC. However, this can only take place if member states prioritise institutional development. The other priority must be to nurture the creation of UAE-based companies with unique specialities, like Abu Dhabi's Masdar.