GCC Natural Gas Sector – Dawn of the ‘gas’ era!
The natural gas market has been attracting more attention in the past couple of years as the world is going green, and needless to say the soaring oil prices have been pushing consumers to the cheaper alternative. GCC members are talking part in this shift to natural gas by heavily investing in gas exploration and production activities. Qatar is the leader among GCC countries in the gas industry because of its massive gas reserves. More cooperation between GCC members in transmitting gas is expected to be witnessed in the future.
• The world gas reserves increased at a CAGR of 1.9% during 1996-2007. By the end of 2007, natural gas reserves of the world stood at 6,448.3Tcf, showing a growth of 0.7% over 2006 gas reserves.
• In 2007, the world gas production stood at 19,250mnboe, which depicts 2002-07 CAGR of 2.5%, an increase of 2,730mnboe. In 2007, most of the production was carried out from Russia, which contributed 21% of total world’s production. The US remained on 2nd position in terms of gas production by contributing 18% of the world’s production.
• The overall world consumption increased with 2002-07 CAGR of 2.4%. The Middle-East has registered the highest demand growth with 2002-07 CAGR of 6.1%. However, the large portion of total gas was consumed in European region, as it accounted for 40.0% of total gas consumption of the world in 2007.
• Throughout the past year natural gas prices have been following an upward trend. The increase in gas prices can be attributed to the huge increases in oil prices over the past year. Henry Hub future contracts have hit their current year high on May 11th, 2008 reaching US$11.6/mmbtu.
• The GCC countries hold a share of 22.7% of the world’s total proven natural gas reserves. We expect the natural gas exploration activities and trade to increase because of growing international and domestic demand.
• Among the GCC members Qatar holds the highest reserves, 907.3Tcf of gas reserves, followed by Saudi Arabia, which contains around 253Tcf of gas, then the UAE containing estimated reserves of 216Tcf.