The GCC grid is still a pipe dream

More than 20 years after the idea of a GCC gas grid was first mooted, the project still remains on paper. A complex mix of factors, among them, "short-term diplomatic and political tensions in the region," are to blame for the delay.
In a paper presented on gas pipeline politics in the Middle East, Lebanon-based energy expert Naji Abi-Saad said that easy availability of low-priced petroleum products in the region diluted the urgency to install a gas network.

When the oil ministers of GCC discussed the gas pipeline project in November 1984 for the first time, the impression given out was that the work would take off immediately. But except for the Dolphin project which has made some progress, nothing has happened regarding the entire gas grid.
Abi-Saad said the Dolphin project (that seeks to link Doha to UAE and Oman) was also facing hurdles due to differences between Qatar and UAE over the pricing of gas. The GCC accounts for 23 % of the world's proven gas reserves and Qatar is the only member country with huge reserves of non-associated gas. Other member states also have non-associated gas reserves but they are too small to commercially explore.

Much of the gas produced in the region is associated gas, said Abi-Saad. Domestic demand for gas has increased over 60 % in the region over the past decade while the demand for oil has risen only by 25 %. Gas is basically consumed as feedstock and fuel in the region but demand is rising in power and water desalination plants and industries.
The latent gas deficit is widening and demand in the region is expected to reach a staggering 77 bn cm by 2008-10. But the problem is that since most GCC states are oil producers, they have the psychological desire for self-sufficiency that actually comes in the way of their need for gas to be had through a regional grid.

Progress on the proposed grid relies crucially on Saudi Arabia. If global energy companies there succeed in finding huge gas reserves that may prompt the country to look for meeting local demand and exporting the surplus.
In that situation, Riyadh may show a keen interest in a regional grid because of the possibility of linking the network for exports to East Mediterranean and Europe via Turkey or Iraq, said Abi-Saad. His was the only paper in the entire 5th Doha Gas Conference which was devoted to gas pipelines.

The session at which Abi-Saad presented the paper was chaired by Robert Dakers, from Pearl GTL, a Qatar Petroleum-Shell gas-to-liquids (GTL) joint venture.