There was a time when a major gas discovery in the deserts of the Middle East was considered a setback. Today, it would be seen as a bonanza.
From waste to be flared away, gas is now the foundation of the region’s industrial growth, economic diversification, and energy security. Gas is enabling cleaner energy systems in the Middle East and promising to be a catalyst for regional transformation.
The MENA region is set to become the world’s second-largest gas producer behind North America, with output having grown more than 15% since 2020 and projected to rise another 30% by 2030. Wood Mackenzie projects Middle East gas production to add 14bcf/d of new supply by then, amounting to the consumption of the entire European power sector, to reach 86bcf/d.
Financing this level of development will require roughly $130b in investment this year, and a cumulative $1.1t by 2050. Public–private partnerships (PPPs), sovereign wealth funds, multilateral development banks (MDBs) as well as debt capital markets, including green and sustainable bonds, are proving to be crucial channels for a considerable portion of the required investment into gas projects as a pathway to lower-carbon growth.
Engine of economic transformation
Three forces elevated gas’s role in the Middle East. The first is population growth and rapid urbanisation, which are driving soaring demand for power, cooling and desalination.
The IEA reports that Middle East electricity use tripled between 2000 and 2023 and is set to rise by another 50% by 2035. Residential consumption, which is 50% higher than global averages, now accounts for nearly 40% of power demand in the region. As populations grow, cooling and desalination alone will drive about 40% of additional power demand in the next decade.
The second force is economic diversification. Gas-fuelled industries underpin much of the region’s non-oil GDP as governments continue to expand into petrochemicals, aluminium, steel, logistics, and tourism. The growing focus on datacentres and AI infrastructure in emerging digital hubs across MENA, with the UAE and Saudi Arabia at the forefront, will soon add significant new demand for power and electricity.
The third force is gas’s unique combination of reliability, affordability and lower emissions, which have elevated it as a strategic energy resource. Gas’s unique ability to be ramped up rapidly also makes it an ideal complement for the intermittency of renewables as they grow in use. In turn, gas provides stable baseload power essential for growth and energy security while helping decarbonise the region’s economy, with nearly half the carbon footprint of coal and other liquid fuels.
The shift from oil-fired power will further intensify gas demand, even as renewables grow. With oil fuelling some 25% of the region’s power, its phase-out will only boost gas demand further. The UAE’s Energy Strategy 2050 illustrates the level of the change: it aims for a mix of 44% clean energy, 38% gas, 12% clean coal and 6% nuclear by mid-century, with oil barely featuring.
Funding the pivot to gas
The speed of this pivot to gas will depend on the level of investment brought to bear. Although gas has vast potential, nearly three-quarters of global upstream investment over the past decade has focused on oil. Some 40tcm of discovered gas remains undeveloped, mostly in the Middle East, Eurasia and Africa, representing a potential 1,300bcm/yr of global supply.
The Gas Exporting Countries Forum (GECF) estimates that $1.1t is needed by 2050 to sustain production and modernise infrastructure in the region. But without new capital, the IEA warns, Middle Eastern and Russian output could decline 45% by 2035—and 65% in advanced economies—increasing global dependence on Middle Eastern gas.
This calls for innovative financing by expanding PPPs, encouraging MDB participation, and enabling interregional sovereign wealth fund investments. So, while Saudi Arabia and Kuwait’s NOCs can largely fund projects domestically, the UAE’s ADNOC has pioneered PPPs with firms such as KKR and Silverlake, in addition to partnerships with regional NOCs to develop upstream projects, pipelines and other midstream projects domestically and across MENA.
In 2023, for example, ADNOC acquired OCI’s 50% stake in Fertiglobe to become the majority owner, making ADNOC the majority owner of Sorfert Algerie (one of Algeria’s largest fertiliser producers). Abu Dhabi energy investment vehicle XRG also formed Arcius Energy as a joint venture with BP to operate gas concessions in Egypt alongside Pharaonic Petroleum Company and Belayim Petroleum.
Such partnerships unlock internal capital and demonstrate asset value, attracting further funding on more favourable terms. Today, foreign sources fund about 40% of upstream investment in the UAE and Oman and 70% in Iraq, and they have quadrupled in Qatar since 2015 amid its accelerated North Field expansion.
Meanwhile, sovereign funds such as ADIA, Mubadala, PIF and QIA are extending their influence by investing globally in energy companies and domestically in major diversification projects.
A prime example is the reported $11b consortium led by BlackRock’s Global Infrastructure Partners, which was joined by Mubadala and PIF, to acquire 49% of Jafurah Midstream Gas Co. in one of Saudi Arabia’s largest ever foreign direct investments since Aramco’s $15.5b pipeline stake sale in 2022. Such financing unlocks the value of the project to redeploy capital further up the value chain.
Interconnection, cooperation and standardisation
The ultimate endpoint for the pivot to gas will be stronger cross-border integration and cooperation in the Middle East. When tied to major investment, integration amplifies the impact and efficiency of projects.
For example, the World Bank-led Pan-Arab Regional Energy Trade Platform, launched in 2016, promotes electricity and gas exchange among Arab nations through harmonised regulations and shared infrastructure. Projects such as the Egypt–Saudi Arabia Grid Link and the Arab Gas Pipeline (which runs from Egypt to Jordan and Lebanon) enhance energy system resilience, allowing for resource sharing and cost savings, while deepening regional interdependence and stability. Similarly, Qatar and the UAE’s Dolphin Pipeline (which runs from Qatar to the UAE and Oman) enables more efficient cross-border gas utilisation and capital deployment.
National reforms, such as Egypt’s liberalisation of its gas market and several MENA countries’ efforts to curb flaring, have already demonstrated how clear, investor-friendly regulations can unlock new capital and technology.
At the cross-border level, regional projects show the value of harmonised technical standards and coordinated crossborder regulatory agreements in enabling regional trade. And finally, localisation will prove vital to ensuring the benefits of such integration remain in-region. Aramco’s IKTVA programme targets 70% local procurement; ADNOC’s ICV framework channels billions to regional suppliers; and QatarEnergy’s Tawteen platform drives technology transfer and greater upstream capacity. Together, they reinforce supply chains and ultimately industrial resilience.
Gas and the region’s strategic future
The Middle East’s gas boom entails more than energy supplies; it encourages greater regional stability, integration and energy security. By leveraging gas as both an export and an enabler of industrial diversification, the region is building more resilient and more balanced economies. Ultimately, robust regulatory frameworks, deeper regional cooperation and synergistic investments will help harness the full economic and strategic value of MENA’s gas resources to unlock sustainable development and drive long-term transformation.
Majid Jafar is CEO of Crescent Petroleum.
This article is part of our forthcoming MENA Gas Report.
Click here to find out more about our Middle East Gas Conference, taking place on 10 December 2025 at the Waldorf Astoria DIFC, Dubai, UAE.
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