Demand growth eclipses increases in production

Oman's natural gas shortage is driven by a growing power-sector and industrial demand.

Oman is facing a growing shortage of natural gas despite increasing production at 6.5 per cent a year since 2005.

The shortage is driven by growing power-sector and industrial demand.

Oman's electricity generation increased as much as 16 per cent in 2009, and power and desalination plants used 11 per cent more natural gas in 2009 than in 2008, at a time when energy use globally fell sharply during the economic downturn that followed the credit crisis of 2008.

Oman receives about 200 million cubic feet per day (cfd) of gas from Qatar through the Dolphin pipeline, but Oman's oil minister has confirmed that Qatar will not provide a higher allocation.

The gas balance is also under pressure from long-term commitments to export liquefied natural gas (LNG). Last year Oman exported 1.1 billion cfd of LNG, primarily to South Korea and Japan - about 40 per cent of domestic gas production.

In addition, increasing amounts of gas need to be re-injected into declining oil deposits to maintain production levels.

Petroleum Development Oman expects to use about 600 million to 700 million cfd for re-injection this year, and this is expected to increase to about 800 million cfd by 2020.

* The National staff

Published: July 17, 2011 04:00 AM


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