The strange rise of coal in the Middle East

by Robin Mills, August 20, 207 UAE Ed The National


The Middle Eastern countries that are looking at coal are trying to diversify their fuel mix, and to reduce vulnerability to economic or supply shocks. Gas is cheap at the moment but its price is volatile, and states such as Dubai, Egypt and Turkey do not want to be too import-dependent. For Dubai, which attracted a very competitive bid from Acwa and Harbin, coal is a key part of strengthening its negotiating position with other suppliers. Iran and Turkey are trying to maximise the use of their domestic coal, and for Turkey, reliance on rivals Iran and Russia for two-thirds of its gas is dangerous.

Despite gas prices being low at the moment, coal is cheaper still — at least once the required import facilities are constructed. Chinese power and engineering companies, looking for other markets, are offering their expertise and low-cost financing.