A Gulf-wide gas network will finally come into being in the near future. The network, whose importance has been highlighted here on more than one occasion, is one of the most important infrastructure initiatives and result in a major development shift.
The UAE, Saudi Arabia and Oman had agreed to establish a natural gas network, which will be later extended to Kuwait and Bahrain and linked to Iraq, Jordan, and Egypt and, perhaps, to Palestine. Natural gas has become an essential component of development and has gained increasing significance given that it represents a clean energy source for the production of electricity.
It is also a catalyst in the field of petrochemicals, fertilisers and plastic and injected into wells to increase production capacity of the oilfields. These aspects are key pillars in the development of fields and what the Gulf and Arab countries are in need of urgently.
Over the last two years, rapid developments have taken place that have sped up the finalisation of an agreement to set up the gas network, and backed by significant discoveries of natural gas sources in the UAE, Saudi Arabia and Bahrain. Such discoveries will turn these countries into major producers of natural gas needed by Oman, Kuwait and Iraq, which will also turn the Gulf gas network into one of the most important integration projects between these countries. It will also contribute to the implementation of vital development projects.
In addition, Saudi Arabia is expected to become one of the top gas producers. In addition to its gas discoveries, it is building, according to Russia’s energy minister, a strategic relationship with Russia to develop gas production in the Arctic, which will turn the two countries into key players besides their roles in the oil market.
This will also sideline some big oil producing countries such as Qatar and Iran and highlights the importance of other major gas producing countries such as Australia, which has become the largest gas exporter in the world beginning this year and overtaking Qatar. The US, which will triple its gas production by the end of the next year, will also emerge as a strategically important gas producing country.
This means the rules of the game will radically change in the next three years, which will further increase the importance of the Gulf gas network. This means a cartel of gas producing countries similar to Opec is likely to be formed. For example, Qatar has tried earlier to set up such a bloc, but no one trusts the dodgy Qatari system, which had stabbed its Gulf brothers in the back and resulted in top gas producers ignoring its call.
This applies to the Gulf gas network, which has been under development for years. With Qatar, the largest producer in the GCC, seeking to impose its control over the network, the other GCC countries are no longer trusting Qatari approaches. In fact, past ones had postponed the establishment of the GCC gas network.
It is true that there is a Dolphin gas pipeline between three Gulf States, but one of the main reasons for its continuation is crossing the UAE, which ensured its arrival to Oman and overcoming all obstacles that Qatar could pursue.
Indications are that the Gulf gas network will be completed as soon as possible. The cooperation among Gulf states without Qatar seems more consistent and effective. Qatar can join this network once it abandons its destructive and provocative role in the region. Its practices and misrepresentations of stability and security are such that there can be no constructive regional development cooperation.
Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.