The Middle East and North Africa (Mena) region needs investments of more than $1 trillion by 2030 to meet demand for gas and electricity, according to a study by US consultancy IHS.
About 50 per cent of economic growth is expected to come from the GCC, with the six-country blocs gas demand expected to increase by 50 per cent by 2030, rising to 400 billion cubic metres from 256 billion cubic metres in 2011.
Demand for oil in the GCC is also expected to surge by about 50 per cent to 6.2 million barrels a day (b/d) by 2030 from about 4 million b/d today, IHS research shows.
Recent political developments in Egypt, geopolitical developments in Iran and emerging energy players like Israel are unlikely to change the need for investment in Mena, says Leila Benali, director, IHS Energy.
On the contrary, leaders in the region want to keep the oil and gas flowing, keep the lights on and their economies growing, she added. Their ability to make these vital investments depends on their ability to diversify their economies and adapt to the global energy revolutions.
The challenge to keep up with gas demand in the GCC has led to new strategies. The UAE started importing gas through the Dolphin pipeline from Qatar, while the UAE, Kuwait and Bahrain have all built, or are building, liquefied natural gas (LNG) importing facilities.
At the same time, the UAE has pursued the development of expensive and technically challenging sour gas fields, while Oman is planning the regions largest tight gas project.
It is important for oil exporters in the Mena region to form closer ties to Asia as the US threatens to rival Middle East exports to the East with new shale oil production coming onstream. This is of particular importance to Saudi Arabia, Kuwait and the UAE, which export most of their crude to the Far East and the Indian subcontinent.
Total trade between the UAE and China grew to $155bn in 2012, while trade between the GCC and India hit $159bn. The GCCs bilateral trade with China and India has grown 16-fold and 29-fold respectively since 2001.
In addition to oil and gas, exports of petrochemicals, plastics and other goods to and from the GCC and Asia will increase in growing trade between the two regions in the next 10 years, says IHS economist Bryan Plamondon.
Development projects in the Gulf will spur the need for imports of machinery and equipment, transport, and infrastructure goods, opening the door for greater trade with Asian countries, he adds.