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MIDDLE EAST & NORTH AFRICA GAS EXPORT PROJECTS to 2015

Country project

Qatar dolphin Pipeline

status

Year online gas Volume (annual) Target markets

underconstruction 2007

20.7 bcm

uae, Oman

iran salman-uae Pipeline planned

2008

algeria Transmed (enrico Mattei) pipeline expansion under-construction 2008

2-5.2 bcm

sharjah, uae

6.5 bcm on top ofexisting 27 bcm italy

egypt egypt-israel Gas Pipeline planned

2008

2-7 bcm

egypt arab Gas Pipeline extension to Turkish Border proposed

10 bcm

Qatar Qatargas 11

underconstruction 2008-09 21.2 bcm / 2x7.8million tonnes

Qatar rasGas 111

Yemen yemen lnG

underconstruction 2008-09 21.2 bcm / 2x7.8million tonnes

underconstruction 2008-09 9.2 bcm / 2x3.4million tonnes

israel

Jordan, syria, lebanon, Turkey Potential linkage

The uK/europe

The us, Taiwan

The us, KoreaMexico

algeria Medgaz

planned

2009

8 bcm

spain /europe

Qatar Qatargas 111

algeria el-andalus lnG

Qatar Qatargas 1V

underconstruction 2009

planned

2009

underconstruction 2010

10.6 bcm /7.8 million tonnes The us

5.4 bcm / 4 million tonnes

10.6 bcm / 7.8 million tonnes The us

algeria skikda replacement lnG planned

2010 + 6.1 bcm /4.5 million tonnes

algeria Galsi Pipeline

iran Pars lnG

iran Persian lnG

planned

planned

planned

2011

8-10 bcm

italy/europe

2011 + 13.6 bcm / 2x5 million tonnes Thailand, China

2012 + 21.8 bcm / 2x8 million tonnes asia, europe

iran iran-Pakistan-india Pipeline proposed

iran iran lnG

planned

iran Qeshm lnG

proposed

2012 + 40-80 bcm

Pakistan, india

2012 + 12.2 bcm / 2x4.5 million tonnes asia

2014 + 5.9 bcm / 3x1.45 million tonnes

iran nabucco link in

proposed

2015 +

10-12 bcm

Central europe

bcm (billion cubic metres. sources: Company reports, statements, news reports.

pacity to implement key upstream projects. A report published by Arab Petroleum Investments Corporation (Apicorp) estimates regional energy capital investments between 2008 and 2012 at $490bn. Of this sizeable amount, the gas supply chain (upstream and downstream) accounts for 45% or $220.5bn. The oil sector (including integrated refinery-petrochemical facilities) and oil-fired power plants will absorb 41% and 14%, respectively, of cumulative investments. Saudi Arabia, Iran and Qatar account for almost half of planned investments, with Saudi Arabia topping the country ranking with $105bn. However,

the ongoing turbulence in global credit markets since last summer and ever-rising engineering, procurement and construction costs may or will affect the highly leveraged downstream and utilities projects within the private sector. Last year, the number of projects fell by 10% in all MENA countries, except for the UAE, according to Apicorp’s annual survey. Regional consumption – driven by low subsidised gas prices – is growing at 7.4% a year compared with global demand growth of only 2.6%. This gave MENA region an 11% share of world demand in 2005, up from 6% in 1990. The dash to gas reflects indus

trialisation drives to reduce over-reliance on the petroleum sector and a ‘switch’ to natural gas in the energy mix, particularly for electricity and water desalination, where the IEA estimates gas usage is soaring by 10% a year, more than twice the OECD and non-OECD averages. The Gulf is expected to invest some $100bn on the utility expansion over the next decade, thereby underpinning gas demand. By 2020, around 60% of the region’s power and desalination capacity could be powered by natural gas, compared to today’s figure of 46%. Industries, commercial and the residential sectors each eat up 14%, respectively, of total gas supplies. While gas re-injection to maintain and boost oil production accounts for the remainder of gas demand. Government subsidies and price caps make the Middle East’s energy costs among the lowest in the world (see below). This, however, places a huge fiscal burden on the Treasury, especially in Iran and Saudi Arabia, among others.

reported domestic gas feedstock prices Egypt $1.19/mn btu Iran $0.35/mn btu Oman $0.80/mn btu Saudi Arabia $0.75/mn btu UAE $1/mn btu

BTU= British Thermal Unit. Source: Natural Gas Market Review 2007.

The region’s share of global exports in 2005 was 16%, equivalent to 150bn cubic metres of gas, on the IEA database. Qatar’s LNG expansion and planned projects in Algeria, Egypt and Iran should lead to higher exports in the coming decade. But Qatar’s moratorium on further gas development from its giant North Field until 2010 will cause a three-year delay in new supplies to the markets. Moreover, vigorous domestic demand is competing for future feedstock allocations. This could, in fact, cancel some export-oriented projects in pipeline (see Table left). The IEA thinks: “Exports [in MENA] are unlikely to keep pace with production in the longer term, as the rewards of world market prices are balanced against the higher financial rewards of oilfield re-injection and economic and social benefits of domestic gas-fired power generation and industry.” The MENA’s natural gas consumption is projected to more than double by 2028, according to a new survey from UK-based Nexant Energy Consultancy. It claims the region in volume terms would boast the third highest average annual demand growth rate after China and India over the next 20 years. Endowed with prodigious hydrocarbons resources, the region will remain at the forefront of the energy industry for the foreseeable future. n

48 The Middle easT June 2008