A recent survey has revealed an opportunity for Gulf Cooperation Council (GCC) states to move to a regionally integrated gas market, which enhances efficiency and supports strategic goals in employment, consumption and investment.
Researchers in Saudi Arabia emphasized that the integration of the gas network within the Gulf countries represented an opportunity to expand the Gulf gas market and increase its efficiency. This means raising the ability of countries that have a surplus of gas to channel their resources as exports within other Gulf States, which in turn, would benefit from the low cost of gas and increase their energy security.
In comments to Asharq Al-Awsat, the King Abdullah Petroleum Studies and Research Center (KAPSARC) said that the countries of the GCC have consumed a combined 296 billion cubic meters of natural gas in 2019, which is equivalent to China’s consumption in the same year. The center noted that the Gulf region had the highest levels of gas consumption per capita in the world.
The opportunity for regional gas sector integration comes as the estimates of the International Energy Agency (IEA) showed that the Covid-19 pandemic would cause investments in the oil and gas sectors in 2020 to drop by 32 percent, compared to 2019.
The analysis prepared by KAPSARC researchers showed that the Gulf countries have 20 percent of the global natural gas reserves, estimated at 1.379 trillion cubic feet. They noted that the region had the right qualifications to move towards a regional integrated gas market.
KAPSARC pointed to three main factors that would contribute to shaping the demand on gas in Saudi Arabia: the continuous reforms of fuel prices, electricity tariffs, and the speed of using renewable energy.
The center noted that natural gas prices in the Gulf countries were the lowest in the world, as governments regulate them to promote industrialization and economic diversification away from oil, generate job opportunities and allow a fair access to prosperity.
“Saudi Arabia intends within its plans to develop unconventional gas, which is expected to contribute to the production of about 30 billion cubic meters annually by 2030,” the center underlined.
