An employee works at Bulgartransgaz gas compressor station near Ihtiman, Bulgaria
Gulf states find themselves at an inflection point where they can do much in global gas supplies. Image Credit: Reuters

The Gulf's gas sector has undergone swift and successive developments that are projected to position it at the forefront of the global energy industry by 2030.

As Qatar's Minister of Energy Saad Al Kaabi stated, Qatar is expected to control 40 per cent of the global gas trade by 2030. This could surpass half of the global gas trade when factoring in the significant discoveries made in the UAE and Saudi Arabia. Following the recent discoveries in Abu Dhabi, ADNOC Gas inked a deal with India to supply 1.2 million metric tonnes of LNG annually for the next 14 years.

The Jafoura field in Saudi Arabia, discovered in 2014, is among the world's largest shale gas fields. There have also been discoveries of conventional and shale gas in Bahrain, Kuwait, and Oman within the past three years.

Catapult to the top in gas supply

Taking into account Iran's gas exports and the fact that it holds the world's second-largest reserves, the Arabian Gulf is set to be the largest gas supplier, surpassing the US, Russia, and Australia. In addition to being the most significant oil exporter, this transition would confer substantial economic and geopolitical influence on the region and establish an even more prominent role for it in international energy trading.

This shift carries significant implications, especially if the GCC countries opt to foster their neutrality by diversifying their relationships. Such initiatives have indeed yielded multiple benefits and bestowed the GCC with the flexibility to play a pivotal role in shaping many aspects of a multipolar global order.

A fair pricing

Among these, the GCC nations, in collaboration with other major gas producers, could strive to secure fair pricing for their gas exports, paralleling what they are doing with oil exports. This could render shale gas production economically viable, akin to the situation with American shale gas, which has transformed the US into one of the largest exporters of liquefied gas.

This transformation is expected to bolster the financial resources of GCC countries, which could be channeled into amplifying growth rates and thus enhancing economic diversification and living standards, and creating more job opportunities. The benefits will be more pronounced if GCC nations coordinate the development of their gas industry.

For instance, the establishment of an integrated Gulf network for natural gas could reduce the cost of supply and transportation and promote export growth. Given the anticipated advances, the long-delayed network is expected to become significantly more valuable.

Controlling 50 per cent of the world's gas exports necessitates large-scale infrastructure to be developed and expanded to match the Gulf's export capabilities. In addition to connecting the Gulf's gas supplies, much like the interconnection in the GCC power grid, there's a need to consider other means, such as gas tankers. It would be more practical to consider initiating a joint Gulf project for manufacturing oil and gas tankers. It's essential for this industry to be established in the region, considering it is the largest for the production and export of oil and gas.

Turkmenistan makes a point

Simultaneously, it's worthwhile to consider the extension of natural gas transportation lines, which cost less than tankers and provide Gulf exports with a trade advantage. Plans have already been proposed to establish gas transmission networks, the most recent being a pipeline project to Europe through the Caspian Sea, presented by the Turkmenistan president at the Gulf and Central Asian Summit recently held in Saudi Arabia.

With Turkmenistan holding the fourth-largest gas reserves, this network can be linked to the Gulf. There are similar proposals for gas pipelines to Europe and Asia through Iraq and Turkey in the west and India and Pakistan in the east. The concept of diversity is significant to bypass any geopolitical obstacles that might obstruct one of the lines.

This will also stimulate competition and variety, providing some assurance due to the commercial and financial gains to be harvested by the producing and transit countries. To realise all these benefits, relentless efforts and speedy coordination at the highest levels are required to ensure integration between anticipated production levels and the infrastructure that can accommodate this significant transformation to the Gulf gas industry.