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29 March 2024

UAE is second largest Arab gas consumer

Arab gas demand soars by over 5 times in 30 years; set to grow further. (SUPPLIED)

Published
By Nadim Kawach

Steady expansion in non-oil sectors has allied with rapid population growth and a switch to cleaner sources of energy to turn the UAE into the second largest gas consumer in the Arab region, according to official data.

By 2010, the UAE has become second only to Saudi Arabia in gas consumption in the Arab region as it is pushing ahead with plans to ease reliance on oil and use gas and nuclear energy in generating its electricity, showed the figures by the Organization of Arab Petroleum Exporting Countries (OAPEC).

From around three billion cubic metres in 1980, gas consumption in the UAE rocketed to 41.3 billion cubic metres in 2005 and is projected to peak at 48.7 billion cubic metres this year, the 10-nation OAPEC said in a study.

Gas consumption in Saudi Arabia, the world’s oil powerhouse, shot up from about 9.5 billion cubic metres in 1980 to 71.2 billion cubic metres in 2005 and is expected to climb to nearly 83.4 billion cubic metres in 2010.

The report by the Kuwaiti-based OAPEC, a key Arab League establishment, showed the combined Arab gas demand also leaped from around 50 billion cubic metres to nearly 241 billion cubic metres in the same period and is forecast to swell to a record high of 283 billion cubic metres this year.

Citing projections by the US Energy Information Administration and the International Energy Agency, the report showed gas consumption by the UAE would swell to around 56.4 billion cubic metres in 2015 and 64 billion cubic metres in 2020. The level is forecast to reach 71.6 billion in 2025.

The report showed the UAE could be overtaken by Egypt in gas consumption given that country’s high population, nearly 15 times of that of the UAE, and Cairo’s programmes to use more gas in electricity production.

The UAE gets a large part of its gas needs from Qatar through a subsea pipeline that pumps supplies from the gigantic offshore North Sea field, the world’s largest single reservoir of natural gas, with estimated reserves of 25 trillion cubic metres.

The UAE has the fifth largest gas resources in the world but a large part of them is associated with oil, making their separation a costly process and entailing an increase in the country’s crude output, which is against OPEC’s quota system.

The report showed total Arab gas demand would rise to nearly 342 billion cubic metres in 2015, around 466 billion in 2020 and 476 billion in 2025.

It showed Arab gas consumption in power generation surged from around 45.1 billion cubic metres in 1996 to 113.8 billion cubic metres in 2005. It is projected to climb to around 174.8 billion this year and 267.3 billion in 2020.

“This boosted the Arab share of total global gas used in power generation from around two per cent in 1996 to four per cent in 2005…it is expected to grow to nearly 5.5 per cent this year and 7.1 per cent in 2030.”

In an earlier study, OAPEC urged member states to intensify efforts to develop their gas resources although the region already controls massive natural gas quantities, mostly in Qatar, Saudi Arabia and the UAE.

“Although the region has one of the largest gas wealth in the world, Arab gas producers can still embark on programmes to benefit from new techniques in the development of non-conventional gas sources,” it said.

“As the OAPEC Secretariat keeps track of developments in new techniques for producing natural gas from unconventional sources, it hopes that OAPEC member countries will be able to benefit from the opportunities offered by such techniques and thereby increase their natural gas reserves.”

Arab countries already control more than 20 per cent of the world’s proven gas resources and nearly 60 per cent of the global oil wealth.

But according to OAPEC, large quantities of oil and gas remained undiscovered or undeveloped in the region, totaling around 175 billion barrels of oil, 43,368 billion cubic metres of natural gas and 67 billion barrels of gas liquids.

In the UAE, the undiscovered hydrocarbon reserves were put at around 7.7 billion barrels of crude oil, 1,261 billion cubic metres of natural gas and 2.4 billion of gas liquids. They were estimated at 87.1 billion barrels of oil in Saudi Arabia, 18,158 billion cubic metres of gas and 48.9 billion barrels of gas liquidity.

In Kuwait, undiscovered reserves were estimated at about 3.8 billion barrels of crude, 194 billion cubic metres of gas and around 0.2 billion barrels of gas liquids. In Iraq, they were put at 54.1 billion barrels of oil, 9,000 billion cubic metres of gas and around 6.2 billion barrels of gas liquids.