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Gulf needs to tap associated gas from oil wells
Associated gas is a by-product of oil production. During the oil extraction process, the associated gas is flared, and is different to dry gas extracted from natural oil wells in the Gulf region.
- By Dr Mohammad Al Asoomi, Special to Gulf News
- Published: 00:03 June 26, 2008
Associated gas is a by-product of oil production. During the oil extraction process, the associated gas is flared, and is different to dry gas extracted from natural oil wells in the Gulf region. This procedure has been carried out in oil wells across the world for around 30 years.
With technological advancement in the oil industry, new techniques have been developed to separate associated gas from oil and reuse it.
Modern technology used in the separation process involves increasing the pressure in oil wells, which eventually leads to increasing product, or transferring it to special stations to be reused in other fields, including power generation.
However, this technology has yet to be utilised optimally in the Gulf. According to Western reports, associated gas worth $10 billion is flared every year in the Middle East. This is a waste at a time when most of the region's countries face a shortage in natural gas.
The region relies on gas for power generation, the need for which doubles every decade. The second reason is the establishment of petrochemical, aluminium and steel industries, all of which depend on natural gas.
Energy cost constitutes 30 per cent of the total cost of aluminium and steel production, while petrochemicals rely on natural gas as an indispensable primary material.
Water desalination projects, an increasing population, the construction boom and the expansion in the service and tourism sector also creates a need for gas.
Gas pipelines have become one of the most important assets of energy supply due to the growing demand for natural gas. For example, we cannot imagine Europe's energy map without gas pipelines spreading across the Russian lands to many European countries.
These pipelines were set up during the peak of the Cold War between the Eastern and Western camps in the 1970s.
Cooperation
Energy cooperation in the region is important in view of the skyrocketing oil prices, as well as the shortage in gas supplies. This has had a negative impact on growth in some economic sectors, especially electricity and manufacturing.
The $10 billion worth of flared associated gas would make a difference to the situation. The region needs to coordinate efforts to make use of this wealth by building proper infrastructure to utilise the gas.
Coordination between the Gulf states could help reduce the cost of separating gas from oil and speed up the development of new technologies.
A portion of the annual $10 billion can be reinvested in Middle Eastern countries that enjoy abundance of water to develop food production, especially in view of the growing global demand, and the resulting high prices
It is possible for countries in this region to be successful if they resolve political differences that block cooperation.
We need to learn a lesson from the eastern and western campaigns, which forged a successful strategic partnership in the energy field 40 years ago despite their differences.
The partnership contributed to the development of many economic sectors in both sides.
In return for energy supplies, East Europe acquired modern equipment and technologies that helped develop its factories and productive institutions.
To achieve this goal, the Gulf needs to separate political variations from economic interests in a manner similar to the process of separating gas from oil.
The writer is a UAE economic expert.
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