Reasons to be hopeful
Gas seen as cornerstone of Arab economic integration
Posted: 26 February 2007
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The Arab states accounted for over 53 trillion cubic metres of natural gas and their production in 2004 amounted to about 302 billion cubic metre, or 10.7% of world marketed production, says a study by the Kuwaiti-based Organisation of Arab Petroleum Exporting Countries.
 The abundance of natural gas together with its environmental and economic advantages, have led to a sharp rise in its use in the Arab countries and the world. Worldwide reserves have risen dramatically, from 77 trillion cubic metres in 1980 to about 182 trillion at the end of 2005.
Applications include power generation, water desalination, as a feedstock in petrochemical industries, fertiliser production, and exports in liquefied form.
The share of natural gas in the total energy consumption of Arab states rose to 44.7% in 2005, says the 10-nation group, which comprises Gulf and other key Arab oil producers.
The increased use of natural gas in Arab states is hardly surprising, because OAPEC member countries in particular have vast reserves. Figures for 2005 show that Qatar has 48.5% of OAPEC reserves, Saudi Arabia 12.8%, the UAE 11.4%, Algeria 8.6%, and Iraq 5.9%.
These countries therefore need to continue developing their natural gas resources, not just for local consumption, but also for export, either by pipeline or gas carriers. The study says they should also intensify their efforts to liquefy it (LNG) and convert it into liquids (GTL), following the example of Qatar and others countries.
Another application suggested is the addition of gas liquids to conventional diesel to boost its specification and produce lower sulphur diesel, without having recourse to additional processing at oil refineries.
“Undoubtedly, the growing role of natural gas in power generation holds the key to future socio-economic development,” the study adds.
“The Arab Summit in Algiers recognised its importance and adopted a resolution for completion of the inter-Arab electricity interconnection project. It called for a study on the possibility of using natural gas to generate electricity and supply those Arab states suffering a shortage and export the surplus via power lines to Europe .
“Moreover, the Council of Arab Electricity Ministers, meeting under the auspices of the Arab League and with the participation of OAPEC's General Secretariat, is engaged in drawing up a framework for studies on this project. It is hoped that they will prove its economic feasibility and that the technical resources will be made available for its implementation.
“A project of this type will be the cornerstone of Arab economic integration. The Arab states' plans to exploit their natural resources will diversify their sources of income. It is therefore anticipated that they will continue to pay attention to the blessings they have, including natural gas, according to their means, international market conditions, and opportunities for cooperation.”
Perhaps the most outstanding example of cooperation is the Arab Gas Pipeline, which links Egypt , Jordan , Syria , and Lebanon . In future it will be extended to Turkey , where it will be connected to the Nabucco pipeline running through Bulgaria , Romania , and Hungary to Austria , where it will join the European gas network.
“To maximise the benefit from this project and turn it into a reality, the four Arab states mentioned above have agreed with the European Union to set up the European Mashraq Arab Gas Pipeline Project, based in Damascus ,” the report adds.
“Other achievements of Arab cooperation in the gas industry include the Dolphin Project being built between Qatar and the United Arab Emirates , which will subsequently be extended to Oman . There are also projects underway between Algeria and Libya . “Although Arab cooperation in natural gas is still in the initial stages, it provides an example of how Arab cooperation can progress. OAPEC's General Secretariat is hopeful that further cooperation in this field will benefit all parties.”
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