MUSCAT – In the GCC's oil and gas industry, past developments have focused more on enhancing the oil sector as opposed to the gas sector. However, with recent reports on the demand for gas both globally and domestically on the rise, as well as unconventional gas competition from the US, the GCC needs to invest significantly to capitalize on this important and profitable industry. The IEA reported that the current 100bn cu. m. (cubic meters) annual demand for gas in the GCC is expected to rise more than 300bn cu. m. in 2020 and up to 600bn cu m by 2030. Power generation is one of the main reasons for the increase in demand especially since countries in the GCC are heavily investing to rapidly develop gas-powered heavy industries such as petrochemicals, aluminum and steel. Furthermore, all electricity generation in the UAE, Qatar and Oman is from gas, and with the population of the GCC expected to reach 53 million by 2020, the GCC will have to depend on gas imports rather than benefit from an export thriving gas industry. In addition to having a severe negative effect on the population, failure to invest adequately in gas will negatively affect the GCC economies, as gas imports will rise drastically. Ahead of the Gas Arabia Summit to be held in Muscat on Dec. 2-5, 2012, Dr. Naji, Managing Director, Petroleb, the Lebanese oil and gas operating company, said: “Governments can intervene to provide organizations and investors with regulations to attract investments in new sources of gas to compete not just with the US, but China and Europe. By doing this, it will put the GCC region on the world map of gas exporting countries, especially since unconventional gas is getting more and more important.” He said the main challenge in the GCC is to develop competing gas resources, especially unconventional gas. This is because the US is increasingly becoming an important exporter of gas in the world market where demand is not increasing in the same way as supply. This would place plenty of pressure on gas producers and exporters in the region and can significantly affect the economic prosperity of the region. Gas is not only important but also cheaper than oil. A report released earlier this year by Qatar National Bank Research Department (QNB Capital), stated that gas could be regarded as cheaper relative to oil if environmental costs are taken into account, as it is a cleaner burning and more efficient fuel. The GCC currently has gas reserves of 42trn cu. m. of gas accounting for 22 per cent of global gas reserves illustrating significant opportunity if addressed strategically. Naji further said GCC countries should follow the example of Saudi Arabia, which is developing its own shale gas and unconventional gas to compete on a global scale. In addition to developing their own resources, GCC countries should also collaborate with member countries and neighbors providing opportunities to speed up the gas sector development process. Naji said: “I believe there are plenty of opportunities in developing the unconventional gas resources. One would be formulating a strategy to import gas from neighboring countries through pipelines. Another would be to build floating LNG terminals in the hope that countries find gas for these terminals to become permanent.” – SG
