Over the next decade, LNG will play a significant role in meeting energy demand in the Mena region
With about 43 per cent of the world’s reserves, it seemed unlikely a decade ago that the Middle East would become a net importer of natural gas. With the exception of Qatar, this is now a possibility as three countries have proposed liquefied natural gas (LNG) import terminals to add to recently built facilities in Kuwait and Dubai.
Bahrain, Jordan and Saudi Arabia could become the Middle East’s newest LNG importers over the next five years, while the UAE is planning a significant boost to import capacity with a new terminal in Fujairah.
The GCC states have made access to cheap natural gas, generally associated with crude production, the bedrock of industrialisation diversification policies.
In Bahrain, Oman, Saudi Arabia and UAE, subsidised electricity prices have allowed fast expansion in power generation, desalination, and energy-intensive manufacturing, such as aluminium. At the same time, the region’s petrochemicals producers have utilised cheap gas to build world-scale cracker complexes.
But the downside of this reliance on subsidies has been rocketing gas demand, which is increasingly putting a strain on the resources of some countries. Demand has already outstripped supply during the summer months.
LNG was originally brought into UAE and Kuwait to meet summer demand, but the expansion of import facilities could see costly imports coming in all year round.
