Gulf Times: Subsidy Must End to Further Develop Middle East's Natural Gas Industry

Subsidies should be reduced and in due time eliminated in the Middle East’s natural gas industry to maintain export ambitions as well as to limit growing domestic consumption, a report has shown.

“One reform that could help to further develop the natural gas industry in the Middle East is addressing subsidies,” said the ‘Brookings Doha Energy Forum Report 2015’.

In a section titled ‘The new era of gas’ the report said that with climate and energy policies becoming increasingly entangled, natural gas has been important as a relatively clean fossil fuel.

As a result of dramatic technological advancements and innovation, in particular related to shale development, there is also increased certainty that natural gas is abundantly available.

Natural gas is the fastest growing primary energy source at around 2% a year.

This growth has been shifting east as Asia becomes the centre of future natural gas demand.

As an illustration, in 2014 close to 75% of global LNG trade took place in Asia.

The price of natural gas in Asian markets is still mostly tied to the price of oil or related products, but it is a very different commodity. Natural gas moves primarily through pipelines, which makes it a regional commodity. MORE