The Middle East’s natural gas industry continues to display dramatic upward growth

The overall project is the largest liquefied natural gas project that has ever been announced, said officials - the contract will be executed by a joint venture led by Chiyoda Corporation with Technip France from Paris, and is part of a $14 billion master project to supply gas, mainly to the United States, starting in 2008 and continuing for at least 25 years.

Each train is designed to produce 7.8 million tons per annum of LNG, with Train 6 scheduled for start up in late 2008, and Train 7 approximately a year later.

These two new LNG trains, with a capacity of 7.8 MTA each, in addition to Qatargas II LNG Trains 4 & 5 which boast the same capacity, and are also being executed by Chiyoda and Technip, represent a giant step towards Qatar becoming the world's largest supplier of LNG with total annual production expected to reach 88 MTA by 2010.

Recognising the growing importance of natural gas to countries throughout the Middle East, IIR Exhibitions, the organisers of Middle East Electricity, the power behind the Middle East energy industry earlier this year announced the launch of a brand new dedicated sector of the show for the natural gas industry. Demand for space at the event, which is already over 90% sold out with four months still to go, has been exceptionally heavy. “Taking its place alongside the vertical sectors for power generation, new & renewable energy and lighting, which have been very well received and are highly regarded by their respective industry sectors, natural gas is a focus area for 2006.” said Sarah Woodbridge, Exhibition Director, Middle East Electricity.

“The consistent rapid expansion of the market, coupled with the increase in both domestic gas consumption and gas exports, means that the business potential is huge, and we are sure that this new sector of the exhibition will play a significant part in the achievement of the region’s ambitions.” added Woodbridge. “Recognising that the latest product and service innovations will be in great demand as governments throughout the region seek to exploit their natural resources by maximising effectiveness in both the domestic and export markets, most of the leading international and regional companies operating in the natural gas industry have confirmed their involvement in what will be their own specially designed showcase.”

The Middle East is rich with natural gas. Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the UAE have huge reserves, and between them possess 42% of the world’s proven gas reserves, with Iran, Qatar, Saudi Arabia and the UAE having the world’s second, third, fourth and fifth largest natural gas reserves In usage terms, the UAE alone is estimated to have enough natural gas to last up to 170 years. This once neglected resource is now the focus of hugely ambitious expansion plans that call for massive foreign direct investment.

Domestic consumption of electricity continues to increase inline with population growth, and the growing demand for domestic hydrocarbons for power generation, petrochemicals and desalination is proving to be the key driver behind the increased usage of natural gas – Saudi Arabia has made increased natural gas production a top priority, and aims to triple output to 15 billion cubic feet a day by 2009.

With gas consumption in the Middle East set to overtake oil demand this year, the long-term outlook for the natural gas sector is extremely positive. Latest forecasts estimate that the share of gas utilised in the Arab energy market will rise from the current level of 48.9% to 53.3% in 2015,– typical evidence of this is that Abu Dhabi’s gas consumption has doubled over the last decade, and currently stands at 4 billion cubic feet a day, while in the highly lucrative export market, global natural gas demand, boosted by the continued volatility of oil prices, continues on a steep upward curve.

Governments throughout the Middle East region are committing multi-billion dollar investment to ensure that their natural gas infrastructures are in perfect shape to take full advantage of this opportunity. Iran’s largest natural gas field, South Pars (estimated reserves 940 trillion cubic feet) has already attracted over US$15 billion in investment, with an additional US$1.9 billion allocated for further expansion of the country’s gas supply grids by end 2005.

Qatar is also firmly committed to increase output, and deals are in place that will see it become a major international energy provider – an integrated natural gas pipeline grid connecting Qatar, the UAE and Oman, with the possibility of a sub-sea connection linking Oman and Pakistan, is already under development. The RasGas Onshore Expansion project is the largest LNG import project announced for the supply of gas to the US, and makes Qatar Petroleum and ExxonMobil leaders in supplying the important US natural gas market. Delivery of LNG to the US is targeted to begin in 2008/2009 and will continue for over 25 years.

Energy Minister Abdullah bin Hamad Al Attiya announced earlier this year that Qatar has plans to invest US$75 billion in a succession of energy projects by 2012, the objective being to make the country the world's largest exporter of LNG with production rising from an expected 20 million tonnes this year to 88 million tonnes in 2012.

With natural gas consumption throughout the EU expected to double over the next 15 years, a report commissioned by the European Union has concluded that a gas pipeline linking the GCC to Europe would be feasible, and this could become a reality by 2025. As part of an extensive plan to link the power and water systems of the GCC, the pipeline would have massive economic benefits for the region.

“The region’s key decision makers depend on Middle East Electricity to bring them the very best the world has to offer, and over 3,600 of them visited in 2005 specifically to source companies and gather information on the natural gas industry.” observed Woodbridge. ”With the continued valuable support of the UAE Ministry of Energy, we will deliver an event that creates the ideal environment for the industry to achieve its desired growth targets, as it benefits from exposure to, and first-hand interaction with, companies that bring global industry quality, expertise and experience to the region”.

Having celebrated 30 successful years in the region this year with a record-breaking event both in terms of size and number of visitors, Middle East Electricity is already looking set to grow yet further. The 2006 exhibition, which takes place from the 5th to 8th of February at Dubai International Exhibition Centre will, in addition to the 16 country pavilions present at Middle East Electricity 2005, feature many new ones, including Brazil, Poland and Croatia.