The Middle East gas market is set to be defined increasingly by the haves and the have-nots in the future as some of the region’s countries that are normally associated with hydrocarbon abundance are seeking to satiate domestic demand for gas by increasing imports.
Speaking at the recent Gas Summit Arabia conference in Abu Dhabi, Brian Buckley, CEO of Oman LNG, explored in his presentation, the current situation of LNG in the Middle East. “The Middle East is increasing its LNG exports by some 58 bcm (billion cubic metres) in the medium term,” said Buckley. “In the last two years, Kuwait and the UAE became importers,” he added.
While Kuwait, UAE and Bahrain are facing a shortage, Qatar, Iran and Iraq are enjoying an abundance of gas, noted Buckley. In Oman, the total gas supply and consumption is balanced out due to the significant demand in the domestic power sector being offset by efforts in enhanced oil recovery (EOR) and industrial expansion, according to Buckley.
Iraq’s gas abundance
The Gas situation in Iraq was addressed by Luay Al Khatteb, executive director of Iraq Energy Institute who also spoke at the summit. “Iraq’s gas demand is at 10% growth per annum, while Iran is at 9%,” said Al Khatteb. Currently, the Iraqi consumption is at about 100 bcm per year.
He also drew a scenario on gas production in his country along with demand expectation by 2020. “Based on production of 7 million barrels [per day], we expect a production of 6 billion cubic feet per day,” said Al Khatteb. “We expect domestic demand to reach 5.5 bcf (billion cubic feet) per day by 2020, power generation sector will require 4 bcf per day, while downstream will require 0.8 bcf per day.”
With this expected gas abundance by 2020, Al Khatteb raised the idea of establishing a company like SABIC, to monetise the gas, rather than export it, and drew lessons from Saudi Arabia which focused on full utilisation rather than depending on exports. “I think it would be a good idea for Iraq to establish a company like SABIC in Saudi Arabia as [it would be an] economic multiplier,” said Al Khatteb.
