RIYADH: Saudi Arabia’s natural gas production is projected to rise by 4 percent in 2025, driven by the planned start-up of key projects, including Jafurah Phase 1 and Tanajib, according to an analysis.
In its Gas Market Report for the first quarter of 2025, the International Energy Agency highlighted that Jafurah Phase 1 will add 2 billion cubic meters of natural gas annually to the Kingdom’s production capacity, while the Tanajib project is expected to contribute 27 billion cubic meters per year.
Saudi Aramco estimates the Jafurah unconventional gas field holds 229 trillion cubic feet of raw gas and 75 billion barrels of condensate. In July 2024, the energy giant secured agreements worth $25 billion for the second phase of the Jafurah development and the third stage of expanding its master gas system.
The IEA report noted that Saudi Arabia’s gas production increased by an estimated 2 percent in 2024, bolstered by the full-year impact of the Hawiyah Gas Plant expansion and the first phase of the South Ghawar unconventional project, which both came online in late 2023.
Additionally, the Kingdom launched operations at the Hawiyah Gas Storage facility in September 2024, marking a milestone in its Liquid Displacement Program, which aims to replace oil with a 50:50 mix of gas and renewables in the electricity sector.
Regional outlook
The IEA’s report highlighted that the Middle East is expected to add more than 20 bcm in natural gas production between 2023 and 2025, representing a 3.3 percent increase.
Oman, which increased output by over 4 percent in 2024, is projected to see an additional 3 percent growth in 2025, driven by production from Block 10 and upgrades to its domestic gas grid.
However, Qatar’s natural gas production declined by 2 percent in 2024 due to shrinking domestic consumption and the accelerated adoption of solar power.
“Gas production in 2025 is expected to remain broadly flat as Qatar’s next major expansion project at North Field East is not expected to start up before 2026,” stated the energy agency.
Iran’s production growth is projected to be modest, with increases of less than 2 percent in 2024 and just over 1 percent in 2025.
The IEA also noted that the Middle East is increasingly turning to natural gas for power generation.
“Natural gas is increasingly displacing oil and oil products in various sectors. This trend is supported by policies, evolving regulatory frameworks and market dynamics,” said IEA.
It added: “In the Middle East, the role of natural gas in the power sector has been increasing in the past decade and oil-to-gas switching continued in 2024, driven by Iran, Iraq, Kuwait and Saudi Arabia.”
Global outlook
Globally, the IEA forecasts tight natural gas markets through 2025, with demand outpacing supply growth.
“Gas market fundamentals have improved over the past year, but for now, we are still seeing significant tightness due to rising demand and muted growth in LNG capacity. Heightened geopolitical uncertainty adds to the risks,” said Keisuke Sadamori, the IEA’s director of Energy Markets and Security.
He added: “While international cooperation on gas supply security has expanded since the recent energy crisis began, greater efforts are needed from responsible producers and consumers, who should strengthen their collective efforts to reinforce the architecture for safe and secure global gas supplies.”
In December 2024, a separate report by the World Bank stated that global natural gas consumption growth in 2024, 2025, and 2026 is expected to return to its pre-pandemic average from 2015 to 2019.
“Growth is primarily driven by the Asia-Pacific region, Middle East and Eurasia. Consumption growth is expected to be similar in 2025 and 2026, with Eurasia demand expected to moderate and European and North American demand to stagnate,” said the World Bank.
It added that the future market dynamics of the gas industry will be influenced by conflict escalation in the Middle East, broader geopolitical developments, and increased competition for LNG shipments.
The IEA also noted that global gas demand rose by 2.8 percent in 2024, significantly outpacing the average growth rate from 2010 to 2020. However, it predicts that growth will slow to below 2 percent in 2025, with Asia accounting for the majority of the rise.
