Buzz Update Saudi Arabia’s senior negotiator Shasly is absent from climate talks in Bonn TOU

Buzz Update Saudi Arabia’s senior negotiator Shasly is absent from climate talks in Bonn
 TOU

Saudi Arabia’s senior negotiator Shasly is absent from climate talks in Bonn

RIYADH: Saudi Arabia is set to drive energy investments in the Middle East and North Africa as the region is expected to wintness a 9-percent growth in investment to $ 879 billion by 2026, a new report from the Arab Petroleum Investments Corp. revealed.

The report titled “MENA Energy Investment Outlook 2022-2026” estimates a $ 74 billion increase from the previous forecast of $ 805 billion released in last year’s five-year outlook.

According to the report, the ongoing tensions in Europe due to the Russia and Ukraine war have led to contrasting impacts on the region’s energy landscape, as energy exporters are increasing their project expenditure, primarily driven by the windfall of oil and gas revenues caused by the spike in prices due to the war.

However, the report further notes that geopolitical tensions and volatility will not curtail oil, gas, power and petrochemicals investment growth in MENA in the next five years.

“Our latest MENA Energy Investment Outlook shows that the region continues to progress on its unique energy transition path. MENA countries shoulder the largest share of global investments in oil and gas going forward to ensure global energy security and avoid an impending super cycle that may severely hamper the world economy, ”said Ramy Al-Ashmawy, senior energy specialist at APICORP.

It added that committed projects comprise around 45 percent of the total energy investments in the Gulf Cooperation Council, 50 percent higher than the MENA-wide average of 30 percent.

The report predicted that Saudi Arabia’s gas-fired energy generation is expected to rise in the next five years, while oil-fired power output is expected to drop over the same period.

Natural gas, which is already a dominant fuel for power generation, is expected to grow to maintain a power generation share of around 70 percent to 75 percent across MENA by 2024, the report added.

On the other hand, oil-fired power is expected to drop from 24 percent of total generation to around 20 percent by 2024, it predicted.

Blue and green hydrogen

According to APICORP’s analysts, blue and green hydrogen is expected to dominate the emerging market in the region soon, and it predicted that hydrogen markets will start scaling up as the market foundations are established.

Suhail Shatila, a senior energy specialist at APICORP, said: “In the medium term, blue hydrogen proves to be a more attractive option to the MENA region. Blue hydrogen can be produced at a relatively low cost, and it will only slightly disrupt the IOC and NOC’s existing business models. ”

He added: “This is a central metric in the energy transition journey since hydrocarbon producers will play a key role in decarbonizing the upstream oil and gas sector and help reach net-zero targets by mid-century.”

The journey to achieve net-zero

The report added that energy diversification is on the top of the agenda of many countries in MENA, as a part of their shared policy objective to diversify the power mix with low-cost, low-carbon energy sources and bolster power supply security.

It revealed that electrification via renewable energy sources will be a key driver which will help Saudi Arabia, Bahrain and the UAE reach their net-zero targets.

The report noted that Jordan and Morocco are the two countries that have steadily reached their renewable targets in recent years.

“The two countries have achieved their short-term policy targets, with Morocco reaching almost 40 percent of its installed capacity from renewable energy in 2021 and Jordan reaching nearly 20 percent,” said APICORP analysts.

It added that other countries such as Saudi Arabia, the UAE, Egypt, and Oman have relatively low renewable energy generation, but “the share is expected to witness a significant increase with several planned and committed large-capacity projects in the pipeline.”

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