Middle East gas 'yet to reach full potential'

The Middle East is still in early stages of development of its natural gas sector and has yet to use the full potential of its resources, according to a senior executive from a regional energy firm.

Majid Jafar, Executive Director of Crescent Petroleum and a Member of the Board of Dana Gas, was speaking at the 14th annual Middle East Gas (Megas) Summit, which began in Abu Dhabi on Sunday and will run until tomorrow.

Jafar said the Middle East accounts for only 12 per cent of global gas production, despite holding 41 per cent of world gas resources.

He highlighted the rapid growth in regional gas demand caused by increasing population and economic growth leading to higher needs for both power plants as well as local industry.

He said more than $160 billion (Dh588bn) of investments are required in the regional gas industry over the next five years as per the study by the Arab Petroleum Investments Corporation.

"Our region is uniquely placed to serve global markets with both oil and gas supplies, and the region itself is also a rapidly growing gas market," Jafar said.

"Despite the high resource potential, however many countries in the region currently have a deficit in gas supplies, and the major policy challenges include energy diversification and demand management – most especially the issue of local price subsidies for gas and electricity, leading to high demand and a burden on government budgets," he added.

Megas 2010, one of the premier events in the oil and gas calendar, offers discussions, roundtables and interactive activities that allow participants to discuss the significant events of the past year and the future issues in the sector. Speaking of the importance of the event, Jafar said: "With the new paradigm shift in oil prices, the gas business in the region is set for rapid and important growth, with a booming market for the gas supplies necessary to fuel power plants, as well as the large needed investments in gas-related industries".

He added: "Megas is one of the region's largest and longest-running industry events, and presents an excellent opportunity for those working in the natural gas and energy sector to come together and share experience, and discuss the future of the industry."

The topics addressed at this year's Megas include gas demand trends in international markets; new concepts in LNG shipping and terminal design; safe handling, treatment storage and disposal of sour gas; the impact of the spot market on project finance; the gas potential of Libya, Yemen and Algeria; and prospects for regional economic recovery.

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