Boom in unconventional gas could present challenges for the Middle East

gas_shellA boom in unconventional natural gas over the next 20 years could have far-reaching consequences for the global gas market, which would see the Middle East's dominance wane at the expense of the US and China, the International Energy Agency (IEA) has said in a report

In the agency's latest World Energy Outlook report on unconventional gas, it said that natural gas could become the world's second most important energy source after oil within the next two decades.

The IEA stated that production of unconventional gas, primarily shale gas, could more than triple to 1.6 trillion cubic feet in 2035, while the share of unconventional gas in total gas output could rise from 14 per cent in 2012 to 32 per cent in 2035.

It also noted that the majority of gas production increases would come after 2020 as producers required time to develop a commercial unconventional gas sector.

According to the IEA, this growth in unconventional gas will have a knock-on effect on the global gas market, which will become more liquid and competitive, and "the US will become a significant player in international gas markets, and China will emerge as a major producer".

“The share of Russia and countries in the Middle East in international gas trade declines from around 45 per cent in 2010 to 35 per cent in 2035, although their gas exports increase by 20 per cent over the same period,” the report added.

In the Middle East, an increasingly important challenge for gas producers, apart from Qatar, will be to try and meet increasing domestic demand for gas. According to the IEA, this would lead to "small amounts of shale gas being produced, mainly in Saudi Arabia and Oman, but conventional gas will continue to predominate".

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