Natural Gas Market in Middle East

Natural Gas in Middle East Market Analysis

The Middle East Natural Gas Market is expected to register a CAGR of greater than 5% during the forecast period.

COVID-19 negatively impacted the market in 2020. Presently the market has now reached pre-pandemic levels.

• Increasing demand for natural gas in the Chemical, Industrial, and transportation sector are expected to drive the demand for natural gas during the forecast period.
• Technological advancements in extracting natural gas create ample opportunities for the market player in the given region.
• Volatility in crude oil prices is hindering the market.
• During the forecast period, Saudi Arabia will be the fastest-growing country in the Middle East Natural gas market. The natural gas share increased to 55% of total energy demand in the Middle East from 52% in 2019 and 45% in 2009.

Natural Gas in Middle East Market Trends

Power generation to Dominate the Market

• Power generation increased by 0.6% in 2020, lower than the 10-year average of +4.5% in the Middle East, with Iran being +3.8% and Israel at +2.4%. They also have the largest growth rates.
• Gas production increased by 8.4 bcm in 2020, driven by an increase in Iran is +3.6% but offset by falling production in Kuwait is -17%, and UAE is -4.7%.
• Moreover, the total electricity generation in the Middle East is 1305.6 terra watt hours in 2021 as compared to 1243 terra watt in 2020. Thus power generation is expected to grow in the given forecast period.
• According to IEA, Middle-East energy production decreased by 3% in 2019 (from 86 EJ to 83 EJ). Oil and natural gas production showed opposite trends, the former dropping by 5% in 2019 to 31% of the world's oil production, whereas the latter grew by 3%, maintaining a 16% share of the global natural gas supply in 2019.
• Hence, owing to the above points, the Power generation segment will likely see significant market growth during the forecast period.

Saudi Arabia Expected to see Significant the Market Growth

Saudi Arabia was the sixth-largest natural gas producer in the world, behind Russia, Iran, Qatar, the United States, and Turkmenistan in 2021. Saudi Arabia's extensive natural gas infrastructure can capture, process, and transport natural gas to the country's demand centers.

As of 2021, the consumption of natural gas increased in the country from 4.07 exajoules in 2020 to 4.22 exajoules in 2021 due to the government's emphasis on boosting gas production and use to lessen its carbon footprint.

Saudi Arabia had a vast increase in natural gas production, going from 99.2 billion cubic meters in 2015 to 117.3 billion cubic meters in 2021. The sector's growth is anticipated to be boosted by a further increase in production.

The nation has an integrated system for collection, processing, and transmitting gas called the master gas system (MGS). This system is used for both associated and non-associated natural gas transportation to produce NGLs (natural gas liquids). The demand for natural gas is anticipated to rise along with the need for NGLs.

Hence, owing to the above points, Saudi Arabia is expected to see significant market growth in the Natural gas market during the forecast period.

Natural Gas in Middle East Industry Overview

The Natural gas market is moderately consolidated. Some of the key players in this market are Saudi Aramco, BP PLC, Total Energies SE, Royal Dutch Shell PLC, and Exxon Mobil Corporation.

Natural Gas in Middle East Market Leaders

Natural Gas in Middle East Market News

• In March 2022, the governments of Saudi Arabia and Kuwait signed a contract to develop the offshore gas resource known as Durra, located in their shared neutral zone. The offshore gas field is anticipated to generate 84,000 barrels of condensate daily and 1 billion cubic feet of gas daily.
• In December 2021, TotalEnergies signed an agreement with the Oman government to sustain the country's natural gas resources and to develop its energy sector more sustainably.