Planned gas investment in the Mena region rose by 29 per cent to $126 billion despite a slump in demand for clean fuel this year, according to the Arab Petroleum Investments Corporation.
The increase comes after a 4 per cent reduction in demand for gas globally this year, compared with 2019, due to the pandemic.
The crunch in demand for gas, which is considered a clean fuel, was largely due to movement restrictions and slowing industrial activity around the world.
Apicorp said the outlook for demand in 2020 was “in stark contrast” to that for 2019, a record year for final investment decisions for liquefied natural gas around the world.
The virus-induced economic crisis is expected to slow the growth rate for global gas demand from the previous estimate of 1.8 per cent to 1.5 per cent during the outlook period from 2020 to 2024.
“The decrease in gas demand has put fiscal pressure on government and private sectors alike," Apicorp chief executive Ahmed Ali Attiga said.
"We expect a few committed projects to continue facing strong headwinds in terms of payments, supply chain issues and potential project delays.”
Strong policy support would be needed from governments to enhance collaboration between the private and public sectors, he said.
A continued integration of the downstream value chain is expected in the Mena region.
Saudi Arabia, Iran and Iraq will take the lead in terms of gas investment. Developments in Saudi Arabia and Iran’s South Pars gasfield will drive gas-to-power projects.
The UAE, which significantly increased its gas investment after the discovery of several significant reserves that pushed it into sixth position worldwide, allocated $22bn towards the development of unconventional and sour gas.
Egypt leads the region in petrochemical sector investment, followed by Iran and Saudi Arabia.
The North African country recorded a $10bn rise in gas activities, particularly related to gas blocks awarded to Chevron, BP and Noble.
