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1 31/12/2020
OAPEC Secretary General HE Ali Sabt Bensabt Delivered a Lecture on “Current Status & Future Prospects of Natural Gas Industry in the Arab World”

Within the framework of cooperation between OAPEC and the Gas Exporting Countries Forum (GECF), OAPEC Secretary General HE Ali Sabt Bensabt delivered a lecture on the “Current Status & Future Prospects of Natural Gas Industry in the Arab World” via videoconferencing, on 22 November 2020, as part of monthly activities organized by the Forum.

The event was inaugurated by GECFSecretary General HE Yury Sentyurin who welcomed OAPEC Secretary General and stressed his keenness on boosting cooperation between the two organisations.

In his speech, HE Bensabt extended thanks to GECF Secretary General for his kind invitation to take part in this prestigious event. He then moved on to present the lecture’s main points, after which he started discussing the impacts of the COVID-19 pandemic on the various aspects of the global economy, including the oil and gas sector, which is among the most affected sectors due to quarantine and lockdown measures taken by many countries to prevent the spread of the virus.

HE Bensabt also indicated that natural gas markets have been affected on various levels including the gas spot price decline to historic levels; postponement of investment in most new projects; and a historic shock in demand.

HE Bensabt then gave the floor to the Director of the Technical Affairs Department at OAPEC, Dr Samir Al Kareish, who gave a presentation on OAPEC, its goals, organisational structure, and its joint ventures. He also tackled the most significant natural gas indicators in the Arab World saying its countries enjoy large natural gas reserves of about 56.3 trillion cubic metres (representing 27% of the world’s total reserves). Dr Al Kareish then spoke about the development of natural gas production in the Arab countries (between 1990-2019) clarifying that it recorded a total growth of 340%, the highest in the world during that period.

On consumption, Arab countries are experiencing an increasing growth in natural gas demand due to its economic and environmental advantages compared to other types of fuel. It recorded an annual growth rate of about 5% (between 1990-2019), the highest in the world during the same period.      

Engineer Wael Abdu Moati, Gas Industries Expert at the Technical Affairs Department in OAPEC, then took the floor and gave a presentation on the status of the Arab countries in global gas markets emphasising that these countries have invested billions of dollars in gas exporting projects to make gas supplies available for key markets, which would support Arab countries’ economies by their revenues.

He also underscored that Arab countries’ total natural gas exports have registered about 200 billion cubic metres (about 16% of the world’s total trade) in 2019. LNG domains the market with about 75%, with the gas via pipeline exports accounting for the remaining 25%. He then moved on to talk about the impacts of the COVID-19 pandemic on LNG markets, clarifying that Arab countries’ exports have been slightly affected in the first 9 months of 2020 compared to the same period in 2019, as they dropped by only 1%. This is due to the nature of contracting between the Arab countries and their clients in the various markets, which is long-term. Arab countries are approved long-term LNG suppliers. He reiterated that such contracts benefit both exporters and consumers and ensure the gas sector’s stability.

He indicated that in spite of the output boom in the Arab World over the past decades, the region is still rich with unexploited gas resources as it accounts for only 16% of the world’s output while it accounts for 27% of the world’s reserves. The Arab World is now facing various challenges, most significantly continued growth of gas demand by high rates exceeding production growth in recent years. Therefore, a number of Arab countries like the UAE, KSA, and Egypt geared towards exploiting other resources that were overlooked previously like: unconventional gas resources; gas cap reservoirs; sour gas reservoirs; as well as, taking other measures like accelerating the development of newly discovered gas fields. Total gas investments in the Arab World are estimated at about $162 billion (between 2020-2024).

Along with these measures, there are promising prospects in LNG exporting in light of new projects scheduled for execution in Qatar, Oman, and Mauritania, which would contribute to raising export capacity from 138 million tons/year in 2019 to about 200 million tons/year by 2027, with a total growth of 45%. There are also other plans to build LNG loading terminals for vessels with a total of 4 projects that would promote the Arab World as a regional LNG loading hub for ships.

At the end of the event, HE Sentyurin extended thanks and appreciation to HE Bensabt for the invaluable contribution and lauded OAPEC’s role in following up the natural gas industry’s developments. On his part, HE Bensabt sincerely thanked HE Sentyurin while looking forward to further cooperation between the two organisations.