GCC demand for gas growing faster than for oil

According to OPEC the growth is expected to expand the proportion of gas in the Arab energy market to more than 46% by 2020.

Saudi Arabia's natural gas demand is expected to reach 14.5 billion cubic feet-a-day over the next 25 years, compared to around 5.5 billion cf/d at present.

Dubai's demand for gas is rising by 15% a year, but in spite of possessing some 214 trillion in gas reserves the UAE does not supply enough gas domestically to power its electricity and desalination plant requirements.

The federation's main oil producer Abu Dhabi also uses almost 2 billion cf/d of its gas to re-inject into oilfields to maintain reservoir pressures.

Elsewhere, energy shortfalls are more manifest with delayed expansion at Aluminium Bahrain and Gulf Petrochemicals Industries' fertiliser plant. Ethane shortages are also stalling development of downstream industries in Saudi Arabia.

Bahrain, which needs to double its gas supply in the next ten years, is at the forefront of those in the Gulf calling for a regional gas network as power and feedstock requirements for a growing industrial base increase dramatically.

Qatar meanwhile, even with its huge gas resources and status as the world's biggest LNG exporter, has declared a pause on new export projects declaring that domestic requirements will take priority.

The emirate consumed 2.2 billion cf/d of gas in 2006 and local demand is expected to rise to 4.3 billion cf/d by 2012.

Abu Dhabi-based Dolphin Energy is supplying gas from Qatar through a sub-sea pipeline to Abu Dhabi Electricity & Water Authority and Dubai Supply Authority, as well as an independent water and power project in Fujairah. Oman also hopes to receive gas from Dolphin this year.

In Abu Dhabi, offshore gas is a critical element of a multi-billion dollar integrated gas development aimed at producing a further 720 million cf/d from the Umm Shaif field.

Kuwait has plans to produce more than 500 million cf/d of gas following the discovery of 34 trillion cubic feet of non-associated gas in 2006. There is also thought to be gas exploration potential offshore, but there will still be a need for imports to sustain industrial development

All of Saudi Arabia's already substantial gas production is for domestic use, but much more is urgently needed and so far little has come from gas exploration projects with international oil companies in the Empty Quarter.

However, there are other good prospects on and offshore and Saudi Aramco has committed $1.5bn to almost doubling output from its Karan gas field in the Gulf which is estimated to contain at least 9 trillion cubic feet of gas.


See also:
Gulf oil producers' stance appears vindicated
Saudi non oil exports top SR10bn in May