Thirst for Growth: Outlook for Gas and Power in the Middle East and North Africa

Political change in the Middle East and North Africa (MENA) region has been capturing worldwide attention. A complex and unpredictable process is continuing to unfold across the region, and this evolving situation will have an impact on global energy, the global economy and international politics.

IHS CERA believes that the most valuable and actionable insights will emerge from looking beyond the day-to-day political dynamics and headlines and focusing instead on the powerful demographic, economic, energy and capital-market drivers that lie beneath the surface. These drivers, which in most cases have not been fundamentally changed by recent political developments, point toward a long-term boom in gas and power sector investment and in infrastructure more generally.

Thirst for Growth: Outlook for Gas and Power in the Middle East and North Africa multiclient study supports the strategic planning efforts of businesses operating in this region by providing the IHS CERA rigorously grounded judgments on the character of this regional investment boom, key areas of opportunity and risk, and the implications for gas and electricity supply, demand, pricing and industry structure to 2030.

Energy companies, industrials, institutional investors and service providers attempting to assess the long-term future of the gas and power industries in this region face a series of questions that hinge on fundamental decisions being made by regional policymakers. Answering these questions will be a central part of the analysis in the Thirst for Growth study.

Questions include:

• Will efforts in economic diversification and development continue to focus on energy-intensive industries or will there be a shift in energy intensity toward a service or high-tech economy?
• Can the MENA region maintain or increase its long-term trend of  four to five percent annual GDP growth?
• Will growth in domestic energy demand, with its knock-on downward effect on energy exports, begin to shift policy away from subsidized pricing?
• To what extent will regional governments phase out subsidies for domestic gas and power prices and what impact would this have on economic growth, energy intensity and demand?
• What is the potential role for cost-based pricing, two-tier pricing and alternatives-based pricing?
• What balance will be struck between gas exports and domestic gas consumption in the evolving energy strategies of key countries in the MENA region?
• Will plans and targets for renewable energy development be realized?
• To what extent can country-level energy imbalances and mismatches be resolved through intraregional cooperation projects?
• To what extent will foreign investors (institutional and strategic) find appropriate openings to participate in the regional infrastructure investment boom, particularly given the large amount of capital available in the region?
• Will the main opportunities lie in the area of service provision?

• The study's two workshops will bring together a diverse community of IHS CERA members to brainstorm and provide feedback. The analysis will take advantage of capabilities and experience not only within IHS CERA, but also across IHS more broadly in the fields of macroeconomics and capital costs analysis. High-level strategic insights will be built on a foundation of detailed and coherent quantitative analysis, including country-level energy balances and projections for gas and power markets.
• Analysis of key drivers will shape IHS CERA judgments on the major questions and uncertainties regarding MENA gas and power and lead to an outlook for regional gas and power markets and investment that can be used for strategic planning purposes. The outlook will include a detailed quantitative assessment of gas and power supply and demand as well as major energy and environmental policy trends. External factors affecting the outlook for MENA—for instance, global economic trends and the future of fuel prices—will be derived from the IHS Global Scenarios framework.

• A final report including an executive summary of the main conclusions of the analysis
• Comprehensive PowerPoint presentations to accompany each workshop
• Country gas and power profiles for 16 countries (see map below)
• Data deliverables for 16 countries (in Excel format):
• Electricity demand by country and sector to 2030
• Power generation by country and fuel or technology to 2030
• Power generation capacity additions by country and fuel or technology to 2030
• Gas demand by country and sector to 2030