The Organization of Arab Petroleum Exporting Countries (Oapec) has said its members support the long-term oil index contracts for natural gas as they provide guaranteed market stability as well as reduce risks on capital-intensive projects.
“In our view, long-term contracts bring stability and a win-win situation between suppliers and consumers,” said Kuwait headquarters agency officials in the 48th edition of the GECF Gas Monthly Lecture Series, organized by Gas Forum of Exporting Countries (GECF), and entitled ‘The Natural Gas Industry in Arab Countries: Reality and Prospects’.
Oapec Secretary General Ali Sabt BenSabt, Director of the Department of Technical Affairs Dr Samir Mahmoud Elkareish, and Gas Eng Specialist Hamed Abdel Moati noted that between 1990 and 2019, the Arab region witnessed the highest total growth rate of funds world proven gas reserves, from 25 tcm to nearly double at 55 tcm, yet production did not match the pace of findings.
“We (the Arab region) generate 60% of global gas production while holding 27% of proven gas reserves. By comparison, North America holds 8% of reserves while producing 28% of global gas production. The symmetry of the gas reserves grows to
the growth of gas production in the Arab world is lower compared to other regions in the period 1990-2019 and investments in gas resources remain to boost production levels, ”said officials.
“The Arab region was one of the biggest contributors to the increase in global gas production over recent decades and played a key global role in providing customers with an efficient, cleaner and sustainable energy source. The key message we have is that gas has the potential to play a greater role in securing a sustainable energy future, ”they added.
This message of a greener global energy system was echoed by the GECF Secretary-General, who claimed that the energy market is undergoing structural changes with natural gas leading the race to the top of the global energy mix because of its clean attributes.
“The pandemic pushed the energy markets into uncharted waters and reduced overall energy demand by 8% in 2020. Fortunately natural gas has suffered a lower percentage decline than either oil or coal and demand to return to growth, although decarbonisation is higher on the agenda than before, ”said Yury Sentyurin of GECF.
The GECF Secretary General also called for greater cooperation between the Forum and Oapec because of the geographical proximity of the two entities, shared member countries, and similar values and missions. The GECF’s headquarters are in Doha, Qatar – the world’s largest LNG exporter.
“I think there is a lot of common ground between the GECF and Oapec. I hope our cooperation can continue to grow in the future, especially in the areas of technical studies and reports, Oapec’s annual meeting of a gas expert group, and international cooperation in the field of natural gas, ”he urged Sentyurin.
Oapec was founded in 1968 in response to the need for long-term interdependence of its members, which currently includes Algeria, Bahrain, Egypt, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, Syria, Tunisia, and United Arab Emirates.
While the Covid-19 pandemic reduced Arab LNG exports by 1% yoy over the nine months of 2020, many Oapec members were undergoing a transformation on the back of urbanization, population growth and globalization.
By 2050, half of the countries in Mena are projected to experience a population increase of at least 50% from their levels in 2015. Among this group, two of the largest increases in population in absolute terms will be in Egypt and Iraq, both members of the Oapec as well as the GECF.
According to Oapec, oil and natural gas reserves have a significant influence on the region’s lives and economies, which is why several countries have announced their plans to expand LNG production capacity over the next 5-7 years, including, Qatar (49 mtpa), Mauritania (10.1), and Oman (1.5). By 2027, LNG capacity in the Arab region will receive a boost of around 45%.
2020-2024 total gas investment in the Arab countries is projected to be approximately $ 162 billion.
“These investments will be in opening new blocks, tapping gas and unconventional cap funds, technically challenging gas fields, and expanding LNG export,” noted Oapec leaders .– Tradearabia News Service