A dynamic shift: the dual energy transition reshaping Middle Eastern energy
James Larnder, Managing Director at Aquaterra Energy
For decades, the Middle East’s oil-and-gas boom has been one of the world’s defining economic success stories. But now, as the world transitions, the region is pivoting to continue its energy success in a greener landscape. As a new Middle Eastern energy sector emerges it may be more than just the energy sources that change. It is reasonable to believe that the future will rely more extensively and willingly on global supply networks, specifically for offshore projects, in a mutually beneficial exchange.
Two parallel transitions
The transition to cleaner energy is not a one-size-fits-all process. In the Middle East, there are at least two parallel transitions taking place, each equally important.
Firstly, there is a move towards renewable energies. The UAE aims to generate 50% of its electricity from renewable sources by 2050, while Saudi Arabia plans to install 58.7 GW of renewable energy capacity by 2030. Additionally, the region sees potential in emerging markets such as green hydrogen, utilising its capacity for cheap and abundant renewable electricity and it is tipped to become a global hub for green hydrogen.
The second transition involves creating a more sustainable oil and gas sector. This challenge and opportunity is a global one, but the Middle East’s scale, relationships, and proven capability in the energy sphere position it as a potential leader in the space who can make a substantial difference.
As brownfield projects reach the end of their lifespan and decommissioning takes hold for a large portion of offshore projects, the Middle East is exploring ways to extend the life of old assess in sustainable ways. Brownfield projects may even be at the forefront of the energy transition in the Middle East with the potential for CCS projects, to use depleted reserves to store sequestered carbon dioxide, contributing to environmental goals.
The changing landscape
The transition in the Middle Eastern energy sector extends beyond energy sources. A new generation of business and engineering talent from the region has gained international experience by working on projects worldwide. This creates opportunities for new ways of engineering for both oil and gas and renewable offshore energy projects.
Operators are now exploring alternative methods. Modular platforms, coupled with jack-up rigs, offer increased efficiency – reducing time to first-oil. Riser analysis techniques, refined in environments like the North Sea, are also being deployed to enhance operations.
The same offshore fabrication and installation strategies applied in the oil and gas industry can be replicated in the region’s future offshore wind sector. Potential locations in the Red Sea, Persian Gulf, and Gulf of Oman for instance, offer opportunities for co-locating green hydrogen production.
The adoption of these modular and flexible designs allows platforms to be tailored to specific field requirements while reducing steel weight by up to 30% compared to traditional designs. Utilising local fabrication facilities supports local content requirements while minimising transport-related emissions. As the Middle East emerges as a potential hub for green steel, sourcing materials within the region can further reduce emissions.
Blueprint for long-term success
Embracing change, operating efficiency, and investing in diversification efforts is key to ensuring long-term success in the Middle Eastern energy sector. To achieve this, operators require robust supply chains that support production targets, reduce costs, maintain high safety standards whilst fostering the development of local content and expertise. Suppliers capable of meeting these requirements will be in high demand, contributing to the region’s sustainable growth.
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