GPCA '06: Mideast gas demand outstrips supply

16 December 2006 13:27  [Source: ICIS news]

DUBAI (ICIS news)--The demand for gas in the Gulf Co-operation Council (GCC) countries is expected to outstrip supply by 77bn cubic metres in 2008-10 from 46bn in 2005, Naji Abi-Aad, research and media strategist, Qatar Petroleum, said on Saturday.

“The growth in demand, coupled with supply constraints, is resulting in an increasing, still latent gas deficit in some GCC countries,” said Abi-Aad.

He pegged the demand for natural gas to be growing between 7-10% per annum in the region, with its downstream applications in power generation, water desalination and petroleum operations.

Growing demand is opening up considerable scope for expansion, Abi-Aad said. Linking a number of GCC states through gas pipelines is slowly emerging as a way of resolving the supply crunch. One such example is the Dolphine Pipeline through Qatar-UAE-Oman and Iran-UAE, he said.

This trend is also raising concerns among the industry about the impact it could have upon the prices.

“Domestic and intra-regional prices of natural gas in the GCC have been relatively low, when compared to international prices and those of local petroleum products,”said Abi-Aad.

But this could change in the future given the tightness in supply and growing demand for natural gas in the GCC.

“Growing local demand and some national gas deficits in the region, combined with higher world oil/gas prices would lead to regional gas prices creeping upwards to more economically reasonable levels,” he said.

By: Mahua Chakravarty
+65 6780 4359

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