Analysis of Gas Export Trends of MENA Countries: Case Study of Yemen

Abstract

The Middle East and North Africa (MENA) region plays a significant role in the global markets of natural gas. Its share of the global pipeline gas exports in 2013 was 8.8%, and its share of the LNG exports was 47% (BP, 2014). The main gas-exporting countries in the region are Algeria, Egypt, Iran, Libya, Oman, Qatar, United Arab Emirates (UAE), and Yemen. Although Yemen is the latest comer in the gas industry and marketing, Yemeni gas has earned the confidence of many countries as well as a good reputation in the global markets. Using the Logarithmic Mean Divisia Index (LMDI) method, this study analyzed the changes in the factors affecting gas export revenue and the effects of these changes on the gas export revenue of Yemen in particular and of the other MENA countries in general in 2004-2013. Considering gas export price, market share, market structure, and total demand the factors affecting gas export revenue, the study obtained results that revealed that the main factor influencing the gas export revenue in the case of Yemen and most of the MENA countries is the market share, while the total demand, market structure, and gas export price play key roles as assisting factors in gas export revenue driving. Yemen ranks second (after Qatar) in the MENA region in terms of market share. The countys market share significantly increased due to the significant growth of its liquefied natural gas (LNG) industry and marketing, especially after the opening of Yemen LNG Plant towards the end of 2009. Even though Yemen has shown a significant increase in its market share, its low gas export prices compared to those of the other MENA countries represent a major obstacle to its further gas export revenue growth. Therefore, this study recommends that the decision makers in the Republic of Yemen adopt the Qatar gas pricing policy to enhance the countrys gas export revenue in the future.