BAKU, Azerbaijan, Dec.19
By Leman Zeynalova – Trend:
Two-thirds of the Middle East and North African (MENA) countries will experience lower investments in their upstream gas sectors, Arab Petroleum Investments Corporation said in its Gas Investment Outlook (2019-2023),Trend reports.
“Reforms have contributed to lower gas demand growth, notably the reduction in energy subsidies and improved energy efficiency and renewables programs. Yet, even though renewable energy is expected to claim a higher share of the power generation mix, there is still a risk of under-investment in upstream gas, as a fair number of the greenfield power projects – in Saudi Arabia (12GW) and Egypt (9GW) – will undoubtedly require additional gas supplies,” reads the report.
The corporation believes that major upsides may possibly come from Qatar, where tenders for additional LNG processing trains – estimated at $15 billion – have recently been issued.
“Iraq meanwhile will continue its efforts to capture more flared gas and ramp up exploration for non-associated gas.”
On the other hand, as the report shows, the declines in gas investments have been largely offset by significant increases in petrochemicals (50 percent year on year). “The increase in petrochemicals investments is part of efforts to further integrate the hydrocarbon supply chain – including refining – and maximise the value of each crude oil barrel.”
The era of tight supply/demand balances in the region over the past decade, which in a few cases led to fast-tracking sub-optimal short-term supply solutions seems to be over, according to Arab Petroleum Investments Corporation.
---
Follow the author on Twitter:@Lyaman_Zeyn