developments in the gcc gas market - manaar co water middle east leader… · developments in the...
Post on 30-May-2020
1 Views
Preview:
TRANSCRIPT
Developments in the GCC Gas Market
Power & Water Middle East Leaders Forum Abu Dhabi, September 2013
1
MENA (esp GCC) highly energy-intensive
0.0
5.0
10.0
15.0
20.0
Pri
mar
y e
ne
rgy
con
sum
pti
on
(to
e/c
apit
a)
• GCC energy intensity is high in general
• Qatar, Bahrain and UAE are particularly high
• High income levels
• Air-conditioning and desalination
• Energy-intensive industry (aluminium, petrochemicals, LNG, etc)
• Subsidised prices, hence waste and inefficiency
• Focus turns to serving domestic gas market rather than export
19/09/2013 2
MENA gas: The haves and have-nots
Sources: BP, USGS, EIA, Petrenel, Baker Hughes, Manaar research
0
1
2
3
4
5
6
0
200
400
600
800
1000
1200
1400
1600
1800
Co
nsu
mp
tio
n, p
rod
uct
ion
(Tc
f/ye
ar)
Res
erve
s, r
eso
urc
es (
Tcf)
Shale gas potential
Exploration potential
Reserves
Production
Consumption
Only modest growth in long-term gas exports
• Middle East and Africa are
the two major exporting
regions
• Asia is the major importing
region
• Russia supplies Europe
• Big change is the emergence
of North American gas exports
after 2015
• However, total Middle East
gas exports do not grow much
-35.0
-25.0
-15.0
-5.0
5.0
15.0
1990 1995 2000 2005 2010 2015 2020 2025 2030
Gas
exp
ort
s (B
cf/d
ay)
North America S & C America
Europe & Eurasia Middle East
Africa Asia Pacific
Shale gas can reshape gas trade flows
• White: satellite imagery of lights = energy demand
• Purple Red: global gas basins, in increasing size of resources (USGS)
• Yellow: main current and future export routes for Middle East gas
Significant shale gas potential
Less LNG demand in Europe?
North African shale gas to Europe
Australian shale-to-LNG
Lower Chinese (and Indian?) LNG imports
North American shale-to-LNG
v
New conventional gas
More intra-MENA gas trade?
Some growth in MENA gas exports to 2015;
little thereafter
-5
0
5
10
15
20
25
2008 2015
Gas
exp
ort
s/im
po
rts
(Bcf
/day
)
UAE JordanBahrain KuwaitSyria IranLebanon YemenOman Libya
Source: Fattouh & Stern
• MENA gas export growth virtually all driven by Qatar & Algeria
– Neither will grow much after 2015 – Algerian exports already declining
– Oman, Egypt exports also declining
– New importers appearing (Kuwait, Dubai, Bahrain, Fujairah)
• Possible export growth from East Mediterranean, Iraq, (Libya and Iran?)
• More gas production (including unconventionals) a necessity for regional and global markets
Qatar
Qatar
Algeria
Algeria
Egypt
Egypt
Libya
Libya Oman
Oman Yemen
Saudi Arabia Gas Issues
• High, seasonal demand for
direct crude burn for power
generation
• Fuel shortages last summer
• Delays to Wasit gas
development
• Refining mismatch – too
much fuel oil, not enough
diesel & gasoline
• Major refining expansions,
but primarily for domestic
use
Source: JODI; Manaar research
0
500
1000
1500
2000
2500
3000
Oct
'10
Jan
'11
Ap
r '1
1
Jul '
11
Oct
'11
Jan
'12
Ap
r '1
2
Jul '
12
Oct
'12
Jan
'13
Ap
r '1
3
Pro
du
ctio
n /
Co
nsu
mp
tio
n (
kbb
l /d
ay)
Saudi Arabia
Apparent CrudeOilConsumption
GasolineConsumption
KerosenesConsumption
DieselConsumption
Fuel OilConsumption
LPGConsumption
Refinery Output
0
2
4
6
8
10
12
2009 2010 2011 2012 2013 2014 2015
ADCO ZADCO Upper Zakum ADMA Shah Gas Other Fields
Cap
ital
Exp
end
itu
re (
US$
Bill
ion
)
PROJECTED
7.8
6
9.7 10.5
9.1
7.3
UAE Historical & Projected Capex in Upstream (2009-2015) ______________________________________________________________________________________
HISTORICAL
5.9
2014: Expiration of ADCO current Concession Expected Additional Capex notably in EOR
Abu Dhabi Vision 2030 - Upstream Objective: Oil production capacity ramp up from 2.5 Mbpd in 2011 to 3.5 Mbpd by 2017
8 Source: WoodMackenzie, MEED
Abu Dhabi: gas supply squeezed to 2016
0
2
4
6
8
10
12
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Ga
s s
up
ply
/d
em
an
d (
Bcf/
da
y)
Bab Hail Shah
IGD AGD-II OGD-III
Imports Existing fields Demand
Dubai: New Supply/Efficiency to Close Demand Gap
0
500
1000
1500
2000
2500
3000
3500
4000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Gas
co
nsu
mp
tio
n /
imp
ort
s (M
Msc
f/d
ay)
Gap
Electricity
LNG imports
Dolphin
ADNOC
Domestic gas production (Margham, DPE)
Gas demand
Gas demand, with coal plant
Gas demand, with coal + efficiency
10
UAE: Gas Imports
Iran Sharjah (Dana Gas / Crescent)
0.5 Bcf/day
Not started (contractual/ technical disputes)
Qatar-UAE/Oman (Dolphin)
2 Bcf/day (+1 ‘interruptible’)
Operational since 2007
Dubai LNG import terminal
3 Mtpa (DUSUP)
Operational since late 2010
Fujairah import terminal (floating)
3.5 Mtpa (IPIC/Mubadala)
Operational 2014/15 19/09/2013 11
Oman: needs unconventional gas to maintain LNG exports
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Ga
s s
up
ply
/d
em
an
d
LNG exports
Oil sector
Industry
Power
Supply
Kuwait: challenges on gas
• The Middle East’s first LNG importer
• LNG imports have cut domestic oil consumption (fuel oil) significantly
• However, progress on Jurassic gas/condensate (tight, sour, deep) limited by
technical & political problems
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Jan
-02
May
-02
Sep
-02
Jan
-03
May
-03
Sep
-03
Jan
-04
May
-04
Sep
-04
Jan
-05
May
-05
Sep
-05
Jan
-06
May
-06
Sep
-06
Jan
-07
May
-07
Sep
-07
Jan
-08
May
-08
Sep
-08
Jan
-09
May
-09
Sep
-09
Jan
-10
May
-10
Sep
-10
Jan
-11
May
-11
Sep
-11
Jan
-12
May
-12
Oil
pro
du
ctio
n/c
on
sum
pti
on
, kb
bl/
day
Crude oil exports
Product exports
Domestic consumption
Source: JODI; Manaar research
Qatar gas use: not constrained domestically, unlike other GCC
19/09/2013 14
0
2
4
6
8
10
12
14
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Gas
use
(B
cf/d
ay)
Gas-to-liquids
Dolphin exports (UAE/Oman)
LNG exports
Other domestic use
Electricity generation
Only Qatar will prevent Middle East LNG exports falling (excluding East Mediterranean)
Mtpa Current Future
Country Import Export Import Export
Qatar 77 Debottleneck 10
Saudi Arabia ?
Iran 10-67 (unlikely)
Yemen YLNG 6.7
Iraq Basra (Shell) 4.5
UAE Dubai FSRU 3 ADGAS 5.6 (expires 2019)
Fujairah FSRU 3.5
Kuwait 3.7 7.5 (2017/18)?)
Oman 10.3 (75% capacity)
Bahrain 3 (2014/15)
Total 6.7 99.6 14+ 14.5+
19/09/2013 15
Attention turning to unconventional gas
• Gulf unconventional plays varied, potentially large
• Sour and contaminated gas (CO2, H2S, nitrogen)
• Tight gas (sands & carbonates)
• Shale gas, condensate and oil
• Deep and ultra-deep
• Mixed resources (e.g. deep, tight and sour)
Source: PacWest; Manaar research
Gas policy motivations vary by country
-10%
10%
30%
50%
70%
90%
-100% -50% 0% 50% 100%
% p
ow
er
gen
era
tio
n f
rom
oil
Net gas imports
Iran
Saudi Arabia
Yemen Iraq
Libya
Kuwait
Syria
Egypt
Oman
Algeria Qatar
Abu Dhabi Bahrain
Tunisia
UAE - Northern Emirates
Morocco
Jordan
Dubai
Lebanon
Bring gas to domestic consumers
Limit dependence on gas imports
Save domestic oil for export
Grow domestic gas to sustain exports
17
Gas pricing reform slowly materialising
0
5
10
15
20
25
Gas
pri
ce e
qu
ival
en
t ($
/MM
Btu
)
18
LOW LEGACY PRICES
HIGH NEXT-GENERATION PRICES
INTERNATIONAL BENCHMARKS
HIGH-COST FUELS
HIGH NEXT-GENERATION PRICES
Source: Manaar research 18
Gas still competitive, even at higher prices
• Alternative generation (solar, nuclear, coal CCS) is cheaper than LNG or oil
• However, high-cost domestic gas (e.g. unconventional) at ~$8/MMBtu is still
competitive against alternatives
19
Source: Manaar research
19/09/2013
Gas/oil fuel prices $/MMBtu
0
5
10
15
20
25
Ele
ctri
city
ge
ne
rati
on
co
st (
$₡
/kW
h)
Dubai retail rate
Kuwait retail rate
Implications of soaring MENA gas demand
• Need for improved efficiency and end to gas flaring
• Challenges to gas-based industrialisation & job creation
• Need for new gas exploration & development
• Power cuts and economic damage
Robin Mills,
Head of Consulting,
Manaar Energy Consulting,
Dubai, UAE
robin.mills@manaarco.com
+971 4 326 6300
+971 50 293 4668
www.manaarco.com
Contact Details
top related