Rising global demand for gas to benefit Oman in long-run, says IMF
With increasing gas production in the sultanate, the continuously growing global demand for natural gas will benefit the country’s economy in the long-run, the International Monetary Fund (IMF) has said.
‘Continued growth of demand for natural gas will benefit Qatar and Oman, where it accounts for 75 per cent and 25 per cent of hydrocarbon revenues, respectively,’ the IMF said in a report.
The increasing gas production from Khazzan field will help the sultanate to earn total gas revenue of RO2.2bn or around 21 per cent of the country’s total projected revenue in 2020, according to Oman’s 2020 budget statement. In the report, themed as ‘The Future of Oil and Fiscal Sustainability in the GCC Region’, the IMF has predicted that going forward the GCC countries might have to face hardship due to prevailing softness in global crude prices.
It also indicated a declining trend in demand growth for natural gas in future, but the gas demand is expected to remain strong due to its low carbon footprint. ‘Growth of global demand for natural gas is expected to slow, although it is expected to remain positive in the coming decades. The declining time trend is weaker in the global demand for natural gas.’
On oil front, the IMF said that the global demand will peak around 2041 at about 115mn barrels a day and will gradually decline thereafter, as the demand-reducing effects of improvements in energy efficiency and increased substitution away from oil begin to dominate the weakened positive impact of rising incomes and population.
By contrast, the IMF said, improvements in energy efficiency will have a more moderate effect on natural gas and its global demand will likely continue to grow.
The report explained that the more gradual decline projection is mainly due to the relatively low-carbon footprint of natural gas, which makes it an appealing cleaner alternative to carbonheavy fuels such as coal and oil.