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Concerns over MENA low pricing policies for domestic gas

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7 December 2011, DOHA – Subsidised gas pricing, rapid growth in domestic demand and the need for gas reinjection, are causing concerns in the Middle East and Northern Africa, said Datuk (Dr) Abdul Rahim Hashim, President, International Gas Union (IGU), today at the 20th World Petroleum Congress in DOHA.

“Despite Qatar being the world’s largest exporter of LNG, and Iran, Egypt and Saudi Arabia having significant gas reserves, there are still countries within the Middle East that are short of gas supply. Whilst the region is concerned with meeting their domestic needs, pricing policies raise a number of considerable challenges where below market pricing is threatening the long-term security of gas supply in the region, ” said Datuk Rahim.

The current policy of providing low priced gas is not usually sustainable in a situation of high demand and low supply. In order to avoid the risk of shortages, gas prices must eventually rise towards global levels, which in turn should increase exploration and production activity and encourage investment and re-investment.

“Another significant dimension is the geopolitical aspect. The region has been engulfed with international conflicts, regional disputes and more recently internal uprising which have reduced the region’s ability to attract investment, affecting MENA’s supply and export potential. The interplay between increasing demand, low pricing policy and geopolitics implies that the MENA region, with the exception of Qatar and Algeria, is unlikely to be able to make a major contribution to future global gas trade, ” said Datuk Rahim.

As the largest natural gas organisation in the world, IGU actively advocates for natural gas, emphasising its attributes as a clean, efficient and abundant energy source, while preserving the environment. With a membership of more than 100 associations and entities world wide, IGU accounts for over 95% of the natural gas traded around the world. Maintaining close ties with many other international energy organisations and cooperating with governments, policy makers and multi-lateral agencies, the IGU has been working with its members including Qatargas, for a number of years, to promote the technical and economic progress of gas.
The 25th World Gas Conference (WGC2012) is a premier event in the gas industry and is often referred to as the “Olympics of the Gas Industry”. The conference and exhibition generates a substantial amount of interest from key players in the local and international gas industry as it explores current and future trends and developments within the gas industry in the world.

Organised by the International Gas Union every three years, WGC2012 will be held from 4-8 June 2012 in Kuala Lumpur, Malaysia. The event, with the theme: “Gas: Sustaining Future Global Growth” will provide a platform for further discussion on gas supply and demand with new dynamics and commercial drivers. It will also address many other current global gas issues, including the geopolitics of natural gas and whether unconventional gas will be a game changer.

“We have developed a programme that encompasses the wide range of issues, opportunities and challenges faced by the gas industry. Across the globe, the World Gas Conference has become the single most important global industry meeting, reflecting the geographic, cultural and social diversity, the economic importance, and the environmental impact of the gas industry, ” said Datuk (Dr) Abdul Rahim Hashim.

About WGC2012
Since 1931, the International Gas Union has been organising the World Gas Conference once every three years; the triennial World Gas Conference and Exhibition is the biggest and most important global gas industry event, attracting 5, 000 industry professionals from all over the world and showcasing the latest developments, with information on policies, strategies technologies, challenges and opportunities. The 25th World Gas Conference will take place in Kuala Lumpur, Malaysia, 4-8 June 2012 with the theme “Gas: Sustaining Future Global Growth.”

About IGU
The International Gas Union was founded in 1931. It is a worldwide non-profit organisation whose objective is to promote the technical and economic progress of the global gas industry.  The members of the IGU are associations and entities of the gas industries in 73 countries which account for over 95% of the natural gas traded around the world, and maintain very close ties with many other international energy organisations. It consists a total of 118 members, of which 78 are charter members and 40 are associate members.

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