APICORP: MENA countries investing $10.3 billion to import LNG

Aug 03, 2016 12:00 AM

Countries in the Middle East and North Africa (MENA) account for a rapidly rising share of global LNG demand and will invest about $10.3 billion in the “medium term” to meet import needs, says Arab Petroleum Investment Corp. (APICORP).

The MENA share of LNG demand will rise to 6.5% by the end of next year from 1% in 2013, according to APICORP Energy Research.

LNG imports by MENA consumer countries totaled 10.5 billion cu m in 2015, of which 40% was from Qatar.

“But these levels will rise steeply, spurred by the present global supply overhang, which should allow regional buyers to lock in preferential prices and allow them to choose from a wider range of suppliers,” APICORP says.

The countries, some of which have problems with creditworthiness, will be cautious about investment in permanent LNG import terminals and increasingly will charter floating storage and regasification units (FSRUs) “as a temporary and lower cost solution.”

Country trends

Kuwait, the first Gulf Cooperation Council member to import LNG, is an exception. Now using an FSRU, it plans a permanent terminal at Mina Al-Ahmadi with capacity of 15 billion cu m/year, capable of being doubled.

In the United Arab Emirates, where LNG imports by Dubai meet peak gas demand during summer, plans for an import facility in Fujairah have been cancelled in favor of a chartered FSRU at Ruwais, Abu Dhabi.

APICORP calls that option a “flexible solution” to meeting power shortfalls until four nuclear reactors are completed in the UAE in the early 2020s.

Bahrain, where growth in electricity demand will be boosted by a new aluminum plant, plans an LNG terminal with capacity of 4.1 billion cu m/year, expandable to 8.2 billion cu m/year.

Saudi Arabia has indicated it might use LNG to supplement its gas supply. The kingdom wants to raise the gas share of power-generation fuel to 70% by 2030 from 50% at present to replace oil.

Egypt, once an exporter through gasification plants at Idku and Damietta, now imports LNG via two FSRUs. In the first quarter, it imported 1.67 billion cu m, more than the summer peak average of 2015.

Even if the offshore Zohr natural gas discovery is developed on schedule, Egyptian gas demand will exceed supply by 2 billion cu m/year by 2021, APICORP predicts. The government has begun a tender to lease a third FSRU.

In Morocco, expansion of power-generation capacity requires 3.5 billion cu m/year of LNG to supplement pipeline imports from Algeria. The utility ONEE plans an import terminal and has issued tenders for the import of 2.7 billion cu m of LNG in 2020, rising to 5 billion cu m by 2023.

Jordan, Lebanon, Iraq

Jordan, which once imported gas from Egypt and Iraq, has turned to diesel and fuel oil in power generation but still generates 80% of its electricity with gas. It began importing LNG with a 7.5-billion-cu-m/year FSRU last year.

Because Jordan has agreed to import gas by pipeline from fields off Israel beginning in 2018, it will not expand its LNG capacity.

Lebanon resorted to fuel oil for power generation after imports from Egypt via the Arab Gas Pipeline ended in 2010. It has issued a tender for a 7.7-billion-cu-m/year FSRU, but progress is slow.

Iraq flared 70% of the 23 billion cu m of gas it produced last year because of a lack of gas-recovery in oil fields and delayed plans for gathering and processing. Power generation therefore is fueled by oil. The planned start-up of 7 Gw of gas-fired capacity will add demand beyond existing shortfalls and make LNG attractive.

“Permanent import facilities are perhaps a stretch in a country where the government is struggling to sustain public spending, but Iraq could take advantage of currently low spot prices and follow other neighboring countries by chartering an FSRU to meet current demand shortfalls,” APICORP says.

Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« April 2021 »
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30

Register to announce Your Event

View All Events