RIYADH, Nov 19: Once the projected new gas discoveries and developments in the sector in the Gulf Arab states — Iran and Iraq — are realized, the region could claim control of almost 50 per cent of the global proven reserves, significantly up from the current 35 per cent, a recent study published in the Oil and Industry bulletin of the UAE Ministry of Petroleum and Mineral Resources revealed.

However, the report also points out that the countries of the Gulf may face competition from Pakistan and some other Asian states in this sector in the near future. “Gulf States are now facing another challenge, which is a growing tendency in Pakistan and other Asian countries to search for gas. There are strong prospects for such discoveries, which could largely boost that region’s gas reserves from the current 10,330 billion cubic metres — accounting for nearly seven per cent of the global gas reserves,” the study pointed out.

Currently, the Gulf has proven gas reserves of 52,230 billion cubic metres of associated and non-associated gas. This turns out to be a ratio of 456 billion cubic metres per one million people, nearly 18 times the global average of 25 billion cubic metres. At the production rate of 2000, such reserves could last 245 years as compared to a global average age of 61 years. The regional reserves could also be sufficient to supply gas to the entire world for 21 years.

“It should be noted that the large gas discoveries in the Gulf over the past years were not a result of the exploration activities but due to development projects carried out in the sector,” the report pointed out. Significant gas projects in the UAE and the multi-billion-dollar liquefied natural gas (LNG) projects recently were taken up in the region, highlighting the above point. Saudi Arabia is also working on a huge, complex $25 billion gas initiative, which may put gas at the centre of energy resource development strategy in the region.

Exploration in the Gulf has always focused on crude oil rather than gas. However, in recent years the development of the gas sector has started to gain due importance throughout the region. According to some US projections, “undiscovered gas reserves in the region are estimated at 36,969 billion cubic metres, nearly 25 per cent of the world’s total gas wealth,” the study mentioned.

Despite the huge reserves, the study indicated that the region produced only 0.4 per cent of its total natural gas potential in 2000 compared with a global production rate of 1.7 per cent. Although exported gas in the region nearly doubled to around 210 billion cubic metres in 2000 from 105 billion cubic metres in 1990, the actual production still remained a fraction of the region’s gas potential.

The Gulf gas producers are also faced with the deregulation of the gas industry in the West. “This (deregulation) means gas price could go down and exporters could find themselves dealing with a large number of smaller and less experienced companies instead of the big companies in charge of importing gas (as yet),” the report emphasized.