APICORP forecasts almost $1trn for energy investment in MENA
The Arab Petroleum Investments Corporation (APICORP), the multilateral development bank focused on the energy sector, has predicted $1trn of investments in the Middle East and North Africa energy sector over the next five years.
According to APICORP’s annual MENA Energy Investment Outlook, the MENA region will see a number of critical energy projects pushed through over the next five years, despite the uncertain geopolitical backdrop.
Around $345bn has been committed to projects under execution while an additional $574bn worth of development is planned. Total investment (committed and planned) of $919bn is forecast over five years, which is 4% lower than 2017 forecast.
The overall economic outlook remains similar to the forecasts estimated this time last year, with growth of around 3.2% forecast for both 2018 and 2019. Global investment in the industry is expected to pick up and parts of the MENA region are expected to see a corresponding improvement in investment.
Saudi Arabia is expected to lead the way, but the uncertainty over the possible re-imposition of sanctions on Iran mean that it may struggle to attract the foreign investment it needs to develop its industry. Iraq is also facing challenges, despite the improving security situation.
Saudi Arabia and the UAE represent 38% of planned investments, with $149bn and $72bn respectively, over the outlook period, as both countries look to boost their upstream oil and gas sectors.
Commenting on the report, Dr Ahmed Ali Attiga, Chief Executive Officer of APICORP, said: “We expect the MENA region to continue investing heavily as major energy-exporting countries expand the size of their energy sector and strengthen their positions in global markets.”
Mustafa Ansari, Senior Economist at APICORP, added: “We see three important trends materialising in our outlook: the first is higher allocation of capital towards the power sector, which now accounts for the bulk of planned investments as demand for electricity continues to increase. The second is the increase in committed investments, reflecting an improving investment climate and a healthy transition of projects from the planning phase towards execution. And third, the private sector has an increasing role to play in financing energy projects in the Middle-East, that will help ease fiscal pressures on governments.”
Trafigura and Yara International explore clean ammonia usage
Reducing shipping emissions is a vital component of the fight against global climate change, yet Greenhouse Gas emissions from the global maritime sector are increasing - and at odds with the IMO's strategy to cut absolute emissions by at least 50% by 2050.
How more than 70,000 ships can decrease their reliance on carbon-based sources is one of transport's most pressing decarbonisation challenges.
Yara and Trafigura intend to collaborate on initiatives that will establish themselves in the clean ammonia value chain. Under the MoU announced today, Trafigura and Yara intend to work together in the following areas:
- The supply of clean ammonia by Yara to Trafigura Group companies
- Exploration of joint R&D initiatives for clean ammonia application as a marine fuel
- Development of new clean ammonia assets including marine fuel infrastructure and market opportunities
Magnus Krogh Ankarstrand, President of Yara Clean Ammonia, said the agreement is a good example of cross-industry collaboration to develop and promote zero-emission fuel in the form of clean ammonia for the shipping industry. "Building clean ammonia value chains is critical to facilitate the transition to zero emission fuels by enabling the hydrogen economy – not least within trade and distribution where both Yara and Trafigura have leading capabilities. Demand and supply of clean ammonia need to be developed in tandem," he said.
There is a growing consensus that hydrogen-based fuels will ultimately be the shipping fuels of the future, but clear and comprehensive regulation is essential, according to Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura.
Ammonia has a number of properties that require "further investigation," according to Wartsila. "It ignites and burns poorly compared to other fuels and is toxic and corrosive, making safe handling and storage important. Burning ammonia could also lead to higher NOx emissions unless controlled either by aftertreatment or by optimising the combustion process," it notes.
Trafigura has co-sponsored the R&D of MAN Energy Solutions’ ammonia-fuelled engine for maritime vessels, has performed in-depth studies of transport fuels with reduced greenhouse gas emissions, and has published a white paper on the need for a global carbon levy for shipping fuels to be introduced by International Maritime Organization.
Oslo-based Yara produces roughly 8.5 million tonnes of ammonia annually and employs a fleet of 11 ammonia carriers, including 5 fully owned ships, and owns 18 marine ammonia terminals with 580 kt of storage capacity – enabling it to produce and deliver ammonia across the globe.
It recently established a new clean ammonia unit to capture growth opportunities in emission-free fuel for shipping and power, carbon-free fertilizer and ammonia for industrial applications.