Estimates of a global consultancy firm show that the GCC could face severe gas shortages as early as 2015 as the supply is struggling to keep pace with the surging demand.
Published by Booz & Company, the report titled ‘Gas shortage in the GCC – how to bridge the gap’, highlights that GCC is faced with increasing power consumption, depleting oil fields, gas exploration and long-term gas export commitments. As a result, the region will only have limited supply of gas to meet domestic requirements.
The government will have to take several short and long-term measures to address the supply-demand imbalance. The report proposes that GCC countries may consider gradually increasing the local gas prices to discourage consumption, while at the same time introduce steps to improve energy efficiency and invest in alternative energy sources.
Another recent report titled ‘The MENA Renewables Status Report‘ by the World Future Energy Summit points out that “signs suggest a significant shift in the region’s diversification efforts over the next decade, especially in the Gulf Cooperation Council (GCC) countries with new investment in renewables in the region totaling Dh10.6 billion ($2.9 billion) by end of 2012, an increase of almost 40 per cent over 2011 and a 650 per cent increase from 2004 with entrance of some of the world’s largest energy players, especially national and international oil and gas companies, into the solar market”.
At the same time, GCC states are investing heavily in the gas sector to tap new sources of supply. Some of the most prominent projects in the region include the Khazzan tight gas project in Oman, the Bab and Shah sour gas projects in Abu Dhabi, and the Emirates LNG import terminal in Fujairah. Qatar and Saudi Arabia are also focusing their efforts on gas developments and closely watching the impact of gas supply outlook on prices.
Photo courtesy: Oman Khazzan