Regional Gas Trade Projects in Arab Countries, Volumes 1 and 2

Abstract

Arab countries hold about 29 percent of the world's proven gas reserves, but every country (except Qatar and Algeria) is short of the gas supply needed to meet its current and projected demand. The rapid growth in gas demand is mostly a consequence of a sharp increase in electricity consumption. Gas trade in the Arab world has been dominated by the objective of exporting gas in the form of liquefied natural gas (LNG) to points in Asia, Europe, and North America. Gas trade within the region is limited to rather small volumes, moved from Algeria to Tunisia and Morocco; from Egypt to Jordan, Syria, and Lebanon; and from Qatar to the United Arab Emirates (UAE) - all through pipelines. The shortage of gas in the Arab countries has become more pronounced, justifying the higher gas prices needed to secure imported gas or to encourage domestic gas production. Such changes in the landscape provide an impetus for the Arab world to optimize the region's gas resources, at least partly on the basis of meeting growing regional demand. The objective of this study is to assist the attempt by: (i) identifying the opportunities for gas trade through cross-border gas pipelines and LNG; (ii) assessing the economic and political aspects of the identified projects; (iii) presenting financing and implementation schemes that utilize the synergy between the public and private sector in project formulation and development; and (iv) reviewing the legal, regulatory, and contractual requirements conducive to regional gas trade. The study focuses on 16 Arab countries situated in the Middle East and North Africa (MENA). Although the MENA region includes some high-income countries (Saudi Arabia, Kuwait, the UAE, Qatar, and others), the emphasis of the study is on the low- and middle-income countries of the region. The study draws upon publicly available information on gas reserves, demand, and supply to carry out an economic analysis of gas trade projects and identify the prospective projects for implementation in the short to medium term.