Investments are being made. The $2.6bn financing for Yemen’s liquefied natural gas (LNG) project is moving ahead and Riyadh has developed a masterplan to develop gas from the Karan and Manifa fields.
But demand for gas is accelerating. In Saudi Arabia alone, consumption is forecast to rise threefold to 14.5 billion cubic feet a day (cf/d) over the next two decades.
The situation is even more pressing in other Middle East states, but there is little spare export capacity. Doha is sticking by its moratorium on export schemes in its North field, while exports from Saudi Arabia, which has the world’s fourth-largest proven gas reserves, remain a distant dream.
Given that backdrop, the masterplan to develop gas from the Karan and Manifa fields cannot come soon enough. Although the project has been fast-tracked, production from Karan, which contains 9 trillion cubic feet of gas, is still only conservatively pitched at 1.5 billion cf/d by 2011.
Much more still needs to be done. Saudi Aramco has, to its credit, unveiled plans to boost its gas reserves by more than 20 per cent over the next five years, and is planning to invest almost $9bn in the sector by 2012.
It is rumoured to be looking for gas in Nafud, the Red Sea and the western region.
Yet it will take a huge discovery – perhaps twice as big as Karan – to propel the kingdom’s gas industry to a level that can cope with booming industrial demand. For now, the region is being too cautious in looking for more.