The Middle-East and North Africa region has around 50% of the world's proven conventional natural gas reserves. Yet this region, known to be the richest in hydrocarbons will face a strange paradox: that of having a critical gas shortage albeit momentarily! The countries of the region, particularly the wealthy Arab Gulf states, have one of the fastest growing rates of energy demand. This is mainly characterized by the increasing consumption of power in the region and its seasonal volatility as well as rapid industrial growth. In fact analysts refer MENA as having 'one of the world's fastest growing rates of power demand on a percentage basis of any region'. On the other hand, with the exception of Qatar and Iran, every other country in the region is facing challenges around supply growth. Consequently, the Gap between the local demand and the local supply will increase rapidly over the next few years. Kuwait, Bahrain, Oman, and to another scale Saudi Arabia have all given signs that they need to find ways of bridging that gap! One of the ways of bridging that gap is to import Gas either via pipeline or LNG as a last resort for some and a smart alternative for others. One may think that Qatar or Iran would logically be providers of gas via pipeline for the region. Yet we are mistaken, why would they do so some argue? LNG represents probably the lowest technical and non-technical transaction costs in the energy mix.
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