GCC will face gas shortage by 2015: report

A recent report published by global consultancy firm Booz & Company maintains gas shortage in the GCC will become more pronounced by 2015 as demand stays strong and supply struggles to keep pace.

The report, titled ‘Gas shortage in the GCC – how to bridge the gap’, suggests that increasing power consumption, depleting oil fields, gas exploration and long-term gas export commitments have limited the local supply of gas in the region.

The report further adds that GCC countries can address the supply-demand imbalance by raising local gas prices gradually, improving energy efficiency and investing in alternative methods to overcome the shortage.

Robin Mills, Head of Consulting at Manaar Energy, says it isn’t a lost cause yet. “The GCC’s gas shortage can be resolved,” says Mills. “But timing is crucial and waiting for solutions to materialise might mean that GCC countries will have to burn more valuable liquid fuels to meet demand,” he adds.

“Governments need a mix of short- and long-term measures to address the gas shortage. They need to invest in new developments to increase production, increase local gas prices steadily to encourage efficiency, and expand the use of alternative sources in the energy mix,” Mills suggests.

“Gas sector investment is expanding rapidly across the GCC. Some of the most interesting projects 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,” he says.

“Other GCC countries equally maintaining their focus on gas developments include Qatar with Barzan and Saudi Arabia with the Karan and Wasit projects,” maintains Mills, who is set to outline recent developments in the GCC gas and power sector and discuss the regional gas supply outlook and its impact on prices at an upcoming conference.

The second Power + Water Leader’s Forum will take place on September 23 at the Abu Dhabi National Exhibition Centre and run alongside the Power + Water Middle East exhibition.

Anita Mathews, Director of Informa Energy Group, organisers of Power + Water Middle East, said that an alternative energy source now making strides in the region is nuclear, adding: “According to research reports, UAE has set an ambitious target of generating one-quarter of its power from nuclear sources over the next 15 to 20 years. To reach this target, Abu Dhabi plans to construct at least six nuclear plants at a cost of more than $5 billion each.

“Despite the global sensitiveness of using nuclear power in the region, it is these types of actions that GCC nations will need to take to diversify the fuel sources for their power generation over the long term.”

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