Middle East set to overtake Asia to become second-largest gas producer by 2025
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The Middle East is poised to overtake Asia as the world’s second-largest gas producer by 2025, trailing only North America, according to new research from Rystad Energy.
Since 2020, gas production in the Middle East has increased by approximately 15%.
This growth highlights the commitment of regional producers to monetise their gas reserves and develop export capabilities, aiming to satisfy global demand.
Current gas production in the Middle East stands at approximately 70 billion cubic feet per day (Bcfd), according to data from Rystad Energy. This output is projected to rise considerably, with a 30% increase anticipated by 2030 and a 34% increase by 2035, the agency said.
Advancements in production
The significant growth is attributed to major advancements in gas production within Saudi Arabia, Iran, Qatar, Oman, and the UAE.
Additionally, by 2030, an additional 20 Bcfd will be added to the region, a volume equivalent to half of Europe’s current total gas demand.
The outlook is dependent on Brent oil prices remaining at $70 per barrel, with oil-indexed gas prices stable within the $7-9 per million British thermal units (MMBtu) range, Rystad said.
A decline in prices to below $6 per MMBtu could lead to delays in new projects. This may result in a reduction of the anticipated volume growth by 2030 from 30% to 20% or even lower, depending on how severe and prolonged the price decrease is.
The region is set to become a significant gas exporter, with an additional 10 Bcfd available by 2030.
Source: Rystad Energy
The expansion in the Middle East will enable it to fully leverage market growth by supplying both European nations, eager to lessen their dependence on Russian energy, and rapidly expanding Asian markets.
A consistent annual production increase of approximately 6% is underpinning this expansion, with overall output anticipated to hit 90 Bcfd by the close of the decade.
“About half of the 20 Bcfd new supply will meet rising domestic demand, particularly from industrial users, while the rest will be available for export,” Mrinal Bhardwaj, senior analyst, upstream research at Rystad Energy, said in a report.
As more long-term gas contracts are signed and export volumes rise, the Middle East is on track to become a key energy hub for countries seeking stable and dependable sources of natural gas.
New projects
Driving the expansion in the Middle East would be new projects capable of producing gas at a cost-effective rate of under $5 per thousand cubic feet, according to Rystad.
The Gulf nations — Qatar, the UAE, and Saudi Arabia — are at the forefront of this gas-driven growth.
Notably, Qatar’s ambitious North Field expansion aims to boost its liquefied natural gas (LNG) capacity by 80%, from 77 to 142 million tonnes per annum (Mtpa) by 2030, all while keeping a competitive breakeven price below $6 per MMBtu, according to the analysis.
Rahul Choudhary, vice president, upstream research at Rystad Energy, said in the report:
A drop below $6 per MMBtu is not ideal for investments, but Middle Eastern projects remain highly resilient due to their low breakeven costs, typically below $5 per thousand cubic feet.
Source: Rystad Energy
The Middle East is set to add 60 Mtpa of new LNG capacity by 2028, nearly half of Rystad Energy’s projected global increase of 150 Mtpa.
This $50 billion expansion is led by Qatar (48 Mtpa from North Field East and South), with contributions from UAE (10 Mtpa from Ruwais LNG) and Oman (1 Mtpa from TotalEnergies’ Marsa LNG), bolstering the region’s global LNG market position.
Production outlook
Currently, Iran leads the Middle East in gas production at around 25 Bcfd, followed by Qatar at 16 Bcfd, and Saudi Arabia at 8 Bcfd, the analysis showed.
Although Iranian gas production has been stagnant in recent years due to Western sanctions, it is projected to increase modestly by 6% to approximately 26 Bcfd by the end of the decade, the agency said.
This output will primarily come from its legacy South Pars field, which experienced a partial shutdown recently due to an Israeli airstrike during the Iran-Israel conflict.
Source: Rystad Energy
In contrast, Qatar is expected to see substantial growth, with production forecast to increase by nearly 50% to 24 Bcfd, largely driven by the ongoing development of its massive North Field.
Expected additions to gas production include 3 Bcfd from both the UAE and Saudi Arabia.
Israel’s output is also projected to rise by 1.5 Bcfd following the next expansion phases at the Leviathan and Tamar fields. While Iran is forecast to be the Middle East’s largest gas producer by the end of the decade, Qatar is anticipated to overtake it in the early 2030s.
UAE and Qatar’s LNG capacity expansions will solidify the region’s role in global LNG trade, the agency said.
New LNG volumes are primarily for Asian and European buyers, favoring Asian markets. Sales and purchase agreements peaked around 21 Mtpa (2027-2030), with Chinese national oil companies and global energy majors as key buyers.
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