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Gas is the rising star of world energy and has a largely untapped abundance in the Middle East. Its cost-competitiveness and lower emissions make it the preferred fuel, especially for power generation, industries and for domestic energy needs. The industrial world and rising economies in Asia especially are looking to Arabia and Iran to meet a significant part of their future gas requirements.
Gas in demand
Middle East gas producers in their own right are also looking to provide the fast growing needs of their local power, desalination, industrial and domestic needs from natural gas.
The Middle East and North Africa contain some 45 per cent of the world's proven gas reserves and the region's share could rise considerably as exploration efforts accelerate in promising onshore areas, such as Saudi Arabia's empty quarter and offshore in the Gulf.
The gas business is not only growing, it is becoming more global as countries unable to tap their own hydrocarbon resources seek secure sources of long-term delivery. As a result the proportion of the world's gas demand likely to be met by imports will grow. Energy analysts agree that these imports will increasingly be delivered in the form of liquefied natural gas. Worldwide LNG demand is forecast to increase over the next 30 years fivefold.
If the current assessments prove correct then by 2030 there will be a need for an extra 500 million tonnes-a-year of LNG production in turn requiring an average of five new LNG processing trains to be built every year for the next 20 years plus downstream infrastructure and specialist shipping to transport the gas.
Mideast gas investment
The massive multi-billion dollar commitments involved in such investments require predictable long-term relationships with governments and commercial enterprises backed by very-long term contracts. Those countries already providing such a foundation are in a pole position to win the lion's share of worldwide business.
According to BP's latest statistical report on world energy, the Middle East's share of world production of gas had reached 10.4 per cent at the end of 2004, from 7.7 per cent a year earlier.
According to ExxonMobil's executive VP Harry Longwell, around 20 per cent of the company's worldwide upstream capital expenditures will be in the Middle East through the end of this decade, and this could be larger as potential new openings emerge
Middle East exports of liquefied natural gas to world markets have more than doubled in the last five years and are destined to rise even faster as gas-related projects in Qatar, Abu Dhabi, Oman and Iran come on stream. Experts also expect that increasingly gas-to-liquids business will become important as a complement to the region's established position as a leading global LNG provider
