“Today, I approved the largest gas deal in Israel’s history. The deal is worth 112 billion shekels (USD 34.7 billion). Of this total, 58 billion shekels (USD 18 billion) will go to the state coffers. The agreement is with the American company Chevron, with Israeli partners who will supply gas to Egypt,” Benjamin Netanyahu said during a televised address.

Energy Minister Eli Cohen, who was present during the address, said it was the “largest export deal in the state’s history.”

Israeli firm NewMed Energy announced in August 2025 the signing of a USD 35 billion deal to provide Egypt with natural gas, and as per the firm, the deal would increase the total volume of gas supplied to Egypt to 130 billion cubic metres.

In a statement issued late on November 17, NewMed CEO Yossi Abu said it was “a historic day for the natural gas sector, one that guarantees continued investment in Israel and creates regulatory stability for years to come.”

In 2024, Egypt imported a record 981 million cubic feet per day of natural gas from Israel, registering a 18.2% year-over-year increase. Egypt imports up to 20% of its gas from Israel. Over the past couple of years, the nation has witnessed its ambitions to become a regional natural gas supply and LNG export hub go up in flames, with a series of setbacks turning the country from a net exporter of the vital commodity to an importer.

Egypt’s natural gas production has experienced a significant decline in recent years, particularly since its peak in 2021 at around 6.6 bcf/d. Data from early 2025 indicated an eight-year low of below 5 billion cubic feet per day.

Egypt’s existing gas fields, including the massive Zohr one, are facing the phenomenon of natural depletion, and it has become a headache for Cairo as Zohr itself accounts for about 40% of the North African country’s total gas production. Production at Zohr has dropped by about a third since 2019.

Lack of discoveries and investment has also taken a toll, with very few significant new gas fields discovered since Zohr in 2015. Also, insufficient investment in exploration and development, partly due to the government’s arrears owed to foreign oil companies, has hampered efforts to offset the natural decline of existing wells.

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A Strong Foundation: Contributing To Türkiye’s Supply Security

Within the framework of the memorandum of understanding signed between the Republic of Azerbaijan and the Republic of Türkiye, SOCAR Türkiye plays a strategic role in Türkiye’s energy supply security by providing up to 1.7 billion cubic metres of natural gas annually. This gas is utilised in the group’s petrochemical and refinery facilities in the country, forming a key link in the integration chain. What sets SOCAR apart is its integrated supply chain approach, which creates simultaneous value across global natural gas and electricity markets.

Robust Presence In The Wholesale Market

As of today, SOCAR Enerji Ticaret stands among the largest private sector players in Türkiye’s wholesale electricity and natural gas markets. The company’s electricity end-user portfolio has reached 300 MW, while its total sales and trading volume have exceeded 1000 MW. By 2024, the combined electricity and natural gas trading volume reached 20 TWh. These figures reflect physical trading capabilities and advanced competencies in portfolio management, price optimisation, and flexible contract structures.

International Electricity Trading

A key pillar of SOCAR Enerji Ticaret’s growth strategy is strengthening regional trade. Since 2023, the company has initiated cross-border electricity trading with Georgia, Bulgaria, and Greece. In 2025, it expanded its scope to include the transit of electricity produced in Azerbaijan to Türkiye via Georgia. This milestone enhances regional energy security, reinforces SOCAR’s position as a source country, and contributes to Türkiye’s diversification of import sources.

From Gas To Power: Toward An Integrated Value Chain

SOCAR Enerji Ticaret is expanding its current operations and aiming to integrate electricity generation into its value chain through its Gas to Power strategy. This includes growing interest in combined cycle gas turbine (CCGT) investments, which enable direct utilisation of gas resources for electricity production. This strategic direction allows for higher value-added use of natural gas and expands cross-border trading potential.

Transformation Through A Sustainability Lens

SOCAR Enerji Ticaret places sustainability at the core of its operations. To increase electricity sales from renewable sources and reduce its carbon footprint, the company integrates mechanisms such as renewable Power Purchase Agreements (rPPA) into its supply portfolio. The solutions offered to customers span a wide range—from gas and electricity supply to tailored energy products, sustainable solutions, green energy, and rooftop solar panel services. In addition to solar projects, the company provided I-REC-certified green energy to 23% of its end-user portfolio in 2024.

With the acquisition of an Aggregator license in 2025, SOCAR Enerji Ticaret aims to transform its experience in power plant management into a broader service portfolio. This step further enhances its portfolio optimisation, balancing, and portfolio management capabilities.

Currently managing a renewable PPA portfolio exceeding 100 MW, SOCAR Enerji Ticaret leverages this capacity to meet its commercial needs and deliver value-added services to its customers. Thanks to its Aggregator license, the company gains the flexibility to manage diverse generation assets from a single centre, positioning itself as a strong energy solutions partner offering secure, competitive, and sustainable supply services.

SOCAR Enerji Ticaret’s growth is shaped by commercial metrics and its vision of energy supply security, regional integration, green transformation, and creating an integrated value chain. By diversifying Azerbaijan’s resources across various supply chains and offering alternative trading products and channels, SOCAR Enerji Ticaret plays a pivotal role in the regional energy transition.

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According to Rystad Energy research, flaring emissions from global upstream oil and gas production increased by 7% from 2022 to 2023. While upstream activities emitted about 1 gigatonne per year of carbon dioxide (CO2) in total, flaring contributed around 30% of those emissions in 2023, assuming 98% flaring efficiency on average.

“Flaring reduction is considered a low-hanging fruit for oil and gas companies trying to reduce their carbon footprint. However, this recent uptick underscores the challenges facing the industry, particularly in key producing countries such as Russia, Iran, and Iraq,” the study noted.

What causes gas to flare?

Despite being inefficient and harmful, flaring is still used today as a relatively safe way to dispose of the related gas from oil extraction. Using related gas frequently necessitates economically viable markets for businesses to invest in its capture, transportation, processing, and sale.

For safety reasons, flaring can be necessary. Oil and gas extraction and processing involve handling extremely high and variable pressures. An explosion could result from an abrupt or significant increase in pressure during crude oil extraction.

Although uncommon, oil and gas-related industrial mishaps can cause hazardous, catastrophic, and protracted fires that are challenging to contain and manage. By burning any extra gas, gas flaring enables operators to depressurise their machinery and control erratic and significant pressure fluctuations.
Technical and economic factors

Oil fields are frequently found in isolated, difficult-to-reach locations. In addition to being difficult to access, these locations might not consistently yield significant quantities of usable associated gas. This can make moving related gas to a processing and use location logistically and financially difficult.

If oil production sites are small and spread out over a wide area, the cost of capturing and using the accompanying gas is often considered too high, so the gas is usually flared. The local geology will occasionally permit the conservation of gas through re-injection back into the reservoir where its use is impractical. Nevertheless, even with recent technical advancements, this is not always possible.

Sometimes a nation’s rules and regulations may make it difficult or even prohibit businesses from commercialising associated gas, even when it is technically and economically possible to capture and use it. For instance, even when a business has obtained the rights to extract oil, it might not be able to use the gas produced during extraction. In other cases, regulations might not outline the commercial handling of related gas. As a result, there is legal uncertainty over the proper processing of related gas. Furthermore, laws that penalise businesses for flaring gas might not always succeed in stopping the practice, particularly if flaring and paying a fine is more profitable than capturing and selling the gas.

To stop frequent flaring and ensure that the related gas is put to good use, GFMR collaborates with governments to help develop appropriate laws and policies.

Effects on the environment

About 148 billion cubic metres of gas were burned in 2023 by thousands of gas flares at oil-producing facilities worldwide. Each cubic metre of associated gas flared produces roughly 2.6 kilogrammes of CO2 equivalent emissions (CO2e), or more than 350 million tons of CO2e annually, assuming a “typical” composition of associated gas, a flare combustion efficiency of 98%, and a Global Warming Potential for methane of 28.

According to the “Intergovernmental Panel on Climate Change,” the inefficiency of flare combustion produces methane emissions, a major cause of global warming that is especially potent in the short to medium term, since over 20 years methane is more than 80 times stronger than carbon dioxide as a warming gas.

The yearly CO2 equivalent emissions have risen by about 80 million tonnes as a result. Naturally, flaring is completely inefficient and far easier to prevent than many other kinds of greenhouse gas (GHG) emissions. Utilising the gas could be beneficial and might even replace more polluting fuels like coal and diesel, which produce more pollutants per unit of energy.

In addition to greenhouse gas emissions, gas flares can generate black carbon, also referred to as soot. Even though black carbon only stays in the atmosphere for a few days or weeks, it has a significant, if short-term, impact on the climate.

It is created when fossil fuels are not completely burned. In the Arctic, where black carbon deposits are thought to accelerate the melting of snow and ice, this is particularly concerning. According to research by the “European Geosciences Union,” gas flaring emissions could be responsible for almost 40% of the Arctic’s yearly black carbon deposits.

The health risks

Communities surrounding oil fields suffer greatly from gas flaring, the burning of excessive natural gas during oil extraction.

Among the several harmful pollutants the process generates are particulate matter (PM), nitrogen oxides (NOX), sulphur dioxide (SO2), benzene, black carbon, and volatile organic compounds (VOCs). Extended exposure to these toxins has been linked to cancer, pregnancy issues, respiratory disorders, cardiovascular problems, and other major medical conditions. Gas flaring’s health hazards disproportionately affect the elderly, children, and individuals with pre-existing medical conditions, among other vulnerable populations.

The aggravation of respiratory ailments is among the most immediate and obvious consequences of gas flaring. Large amounts of fine particulate matter (PM2.5), nitrogen oxides, and sulphur dioxide produced by burning natural gas all worsen air pollution and compromise lung health. Small enough to pass deep into the lungs and even into the bloodstream, PM2.5 particles cause inflammation, chronic bronchitis, and aggravation of illnesses, including asthma and chronic obstructive pulmonary disease (COPD).

Studies have linked high levels of PM2.5 to higher rates of emergency room visits and hospitalisations for respiratory problems in exposed communities. A 2021 study found that hospital admissions for respiratory-related diseases rose 0.73% for every 1% rise in flaring gas emissions. Additionally, nitrogen oxides can aggravate airways, lower lung capacity, and increase the risk of respiratory infections.

Furthermore, contaminants released during gas flaring greatly compromise cardiovascular health. Specifically, fine particulate matter has been associated with stroke, hypertension, and heart disease. These particles aggravate oxidative stress and systemic inflammation when inhaled, which can damage blood vessels and raise the risk of clot development. Long-term gas flaring-related air pollution exposure raises the risk of heart failure, arrhythmias, and heart attacks.

Sulphur dioxide, another pollutant produced during gas flaring, is known to have immediate cardiovascular effects, especially in those with pre-existing heart diseases. Studies have indicated that rises in SO2 levels correspond with increases in hospital admissions for heart attacks and strokes.

Additionally, benzene and other VOCs help form ground-level ozone, which has been linked to higher blood pressure and other cardiovascular symptoms.

Extended exposure to carcinogens, including benzene, toluene, ethylbenzene, and xylene (BTEX chemicals), increases the risk of cancer in communities near gas flaring sites. Particularly, benzene is a well-documented carcinogen directly linked to leukaemia and other blood diseases.

For instance, Basra, Iraq, where significant gas flaring occurs, has seen a sharp increase in cancer rates. The area recorded a 20% rise in cancer diagnoses between 2015 and 2018, a trend attributed to extended exposure to benzene and other harmful pollutants. Similarly, research conducted in the Niger Delta, one of the most severely impacted areas worldwide, has revealed increased leukaemia and other cancer rates in areas close to oil drilling facilities.

Another class of carcinogens generated during gas flaring, polycyclic aromatic hydrocarbons (PAHs), can attach to DNA and induce mutations, causing cancer. By either direct inhalation or skin absorption, these toxins raise the likelihood of lung, liver, and other organ malignancies.

Adverse birth outcomes are far more likely for pregnant women living near gas flaring sites. Studies have connected low birth weights, preterm births, and birth abnormalities to air pollution from flaring. Pollutants such as VOCs and fine particulate matter can cause placental inflammation, disrupting fetal development and raising the risk of pregnancy problems.

Pregnant women living within three miles of oil and gas flaring facilities had a 50% higher risk of delivering prematurely, according to a study in Texas, than those living further away. Furthermore, benzene exposure is linked to a higher risk of stillbirths, spontaneous abortions, and developmental abnormalities in children.

Beyond pregnancy problems, gas flaring pollutants can also affect reproductive health. Heavy metals and endocrine-disrupting agents released during flaring can interfere with hormone production, leading to irregular periods, lower fertility, and a higher risk of miscarriages.

New studies point to strong neurological and cognitive consequences from gas flaring-related air pollution. Children with neurodevelopmental disorders, including lower IQ levels, attention deficit hyperactivity disorder (ADHD), and autism spectrum disorders, have been linked to prolonged exposure to hazardous substances, including benzene, lead, and other heavy metals.

High levels of air pollution from flaring have been linked to cognitive decline, increased risk of neurological disorders, including Alzheimer’s and Parkinson’s, and higher rates of depression and anxiety among adults. Long-term cognitive and emotional problems can result from brain cell damage and impaired neurotransmitter activity caused by toxins.

Additionally, gas flaring emissions aggravate dermatological and ophthalmological problems. Skin irritation, rashes, and allergic reactions can result from sulphur oxides and other acidic pollutants. Fine particulates, such as black carbon, can severely irritate the eyes, induce redness, and increase susceptibility to infections. Prolonged exposure might worsen chronic skin disorders, including psoriasis and eczema.

Although gas flaring poses hazards to all exposed populations, some groups are more sensitive than others. Children’s lungs and immune systems are still developing; hence, they are more vulnerable to neurodevelopmental problems, asthma, and respiratory infections.

Elderly populations, especially those with prior heart or lung conditions, have a higher risk of hospitalisation and early death due to air pollution. Low-income neighbourhoods suffer most from gas flaring-related health issues, as they often lack access to sufficient healthcare and live near oil drilling sites.

Stricter regulations and enforcement of policies to reduce emissions are urgently needed due to the significant health risks associated with gas flaring. While oil firms could invest in greener methods to capture and use related gas rather than flaring it, governments must enforce strict air quality standards.

Reducing the impact of gas flaring on sensitive populations also depends on public health campaigns, medical monitoring of affected communities, and improved healthcare access. Moreover, international initiatives like the World Bank’s “Zero Routine Flaring by 2030” project must be reinforced to ensure that oil-producing countries commit to ending routine flaring. Inaction has severe health consequences, so immediate intervention is required to safeguard the well-being of millions of people globally.

The health hazards of gas flaring are severe and diverse, affecting respiratory, cardiovascular, reproductive, neurological, and dermatological health. Communities living near flaring sites suffer disproportionately, with higher rates of cancer, birth problems, and chronic illnesses. Scientific evidence is clear: gas flaring is a public health risk that requires prompt and sustained action from governments, businesses, and international agencies. Reducing flaring and transitioning to greener energy sources can significantly improve global public health and environmental sustainability.

Finding redressals

Oil producers have the option of using associated gas productively or re-injecting it. The cost of stopping all routine flaring could exceed $100 billion, and operators frequently face significant challenges in capturing, treating, storing, transporting, and commercialising related gas.

Reaching economies of scale is crucial to the conventional method of using flare gas, which involves gathering related gas and transferring it via pipeline. To be profitable, operators typically need to collect significant amounts of associated gas from multiple flare sites, preferably close together, and then build the infrastructure required to market the gas—for example, to produce electricity and expand energy access.

However, there are several approaches to addressing routine gas flaring. Governments can implement efficient laws and policies to promote and incentivise reductions in gas flaring in the interim.

The potential for associated gas use has also increased significantly in recent years due to advancements in small-scale gas utilisation technologies. Not all of these technologies are cost-effective, and many depend on fuel prices and end-product values.

Although costly to install, integrated compressed natural gas systems, truck-mounted liquefied natural gas plants, and small power generation units are often good alternatives to flaring.

Positively, the amount of associated gas flared has dropped by 11% since 1996, despite an approximate 28% rise in oil production. The growing decoupling of the historical link between oil production and gas flaring indicates progress in the oil industry.

Many oil field operators who flare associated gas are investing in ways to reduce flaring. Numerous companies have also committed to ending routine flaring.
The Zero Routine Flaring by 2030 (ZRF) initiative, launched in 2015 by the World Bank and the UN Secretary-General, commits governments and oil companies to ending routine flaring of gas in existing legacy flaring operations as soon as possible and no later than 2030.

Gas flaring represents a profound and ongoing environmental and public health challenge, squandering valuable natural resources while contributing significantly to greenhouse gas emissions, air pollution, and climate change. The practice imperils vulnerable populations, exacerbating respiratory, cardiovascular, neurological, reproductive, and dermatological health outcomes, particularly among children, the elderly, and low-income communities.

Although technical, economic, and regulatory obstacles complicate the full utilisation of associated gas, innovative solutions, policy interventions, and small-scale technologies demonstrate that substantial reductions are achievable. Global initiatives like the “Zero Routine Flaring by 2030” project highlight the path forward, highlighting the urgent need for coordinated action. Mitigating gas flaring is a critical step toward safeguarding human health and ensuring sustainable energy futures worldwide.

The post Gas flaring: A hidden public health threat appeared first on International Finance.

Diversifying energy sources and advancing natural gas projects were the main topics of discussion at the Ministry of Energy and Mineral Resources in Amman, according to the Jordanian news agency Petra. This is in line with the national security and sustainable development plans of both nations.

In order to carry out upcoming projects that are anticipated to generate favourable economic returns and further enhance regional cooperation, the two parties discussed ways to take advantage of their shared resources and expertise.

Badawi met with the Jordanian-Egyptian Fajr Co. to evaluate its operations and plans while he was in Jordan to build the country’s infrastructure for natural gas. The strategic significance of the main gas network, which stretches 500 kilometres from southern to northern Jordan, was highlighted by the visit.

During his visit, Badawi also assessed the development of strengthening the network’s capacity and associated infrastructure. The Egyptian minister also examined the ongoing and future projects that Egyptian petroleum companies have planned to implement in Jordan.

In order to optimise the economic and environmental advantages of natural gas use in Jordan’s diverse sectors, he emphasised the significance of quickening these initiatives.

Talking about the Egyptian energy sector, Prime Minister Mostafa Madbouly on December 24 convened a meeting to assess the progress of several key projects within the electricity sector. The meeting included Minister of Electricity and Renewable Energy Mahmoud Essmat, Deputy Minister of Electricity and Renewable Energy Sabah Mashaly, CEO of the New and Renewable Energy Authority Ahmed El-Khayat, Chairperson of the Egyptian Electricity Transmission Company Mona Rizk, and officials from a consulting office.

The Prime Minister stressed the importance of electricity sector projects, particularly those that align with the government’s plan to increase the production and sustainability of new and renewable energy sources. He further highlighted their role in stabilising electrical grids to support national development goals.

Mohamed El-Homsani, the official spokesperson for the Cabinet, said discussions focused on several important projects, most notably the Egyptian-Saudi electrical interconnection project. The meeting reviewed the progress of various components of this project, including overhead lines and submarine cables. A detailed update was provided on the 500 kV DC Egyptian-Saudi interconnection station in Badr City, along with the planned schedule for its completion.

The meeting also included an overview of recent developments in land allocation for renewable energy initiatives. A total of 42,600 square kilometres has been designated for these projects. The locations of planned renewable energy projects through 2040 were examined.

El-Homsani added that the meeting included a progress report on wind power generation projects in the West Gulf of Suez, South Hurghada and Zaafarana regions, along with updates on solar power generation projects.

As per the reports, the status of green hydrogen production projects and related byproducts was also addressed. The meeting included a discussion on framework agreements and memorandums of understanding that have been established. The handover of land to companies undertaking these projects, both in the pilot and initial phases, was also reviewed.

The meeting concluded with a review of several land plots currently under consideration in collaboration with the National Centre for the Utilisation of State Lands. The goal is to leverage these areas for additional electricity generation projects using renewable energy sources, according to El-Homsani.

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As Türkiye’s largest integrated industrial group, SOCAR Türkiye has expanded its operations in sectors like petrochemicals, refining, natural gas, trade, transmission and distribution, while continuously increasing its production capacity with our value chain extending from the source to the end user.

One such success story has been SOCAR Energy Trade, which has become the largest private sector natural gas wholesale portfolio in Türkiye, while carrying out SOCAR Türkiye’s natural gas and electricity, trade and sales activities since 2009.

International Finance recently caught up with Fuad Ibrahimov, SOCAR Türkiye, Head of Gas Business Unit, who shared his views about SOCAR Energy Trade, its import and export operations, and much more.

Can you briefly tell us about the electricity and natural gas trade operations of SOCAR Energy Trade?

SOCAR Türkiye contributes to country’s supply security by supplying up to 1.7 billion cubic metres of gas annually under the memorandum of understanding signed by the Ministries of Energy of the Republic of Azerbaijan and the Republic of Turkiye.

Accordingly, at SOCAR Energy Trade, we are a key link in the supply chain of the entire group. We make sure the Azerbaijani gas is used in our own petrochemical and refinery facilities in Turkiye. However, what I consider a key factor in our winning this award is our business model which goes beyond merely meeting the gas and electricity needs of our group companies.

Today, we stand as one of the prominent private sector players in Turkiye in the wholesale markets for both electricity and gas. For years, we have been providing gas and electricity to the B2B customers in our portfolio.

Our end-user portfolio volume for electricity rose to 300 MW while the electricity sales and trading volume stood at 750 MW. In 2023, our total trading and sales volume for gas and electricity hit the 21-terawatt mark.

Can you provide information on SOCAR Energy Trade’s import and export operations?

SOCAR Türkiye actively employs import and export channels to maximise the benefits of group companies and create added value. In addition to long-term contracts, SOCAR Türkiye procures natural gas from Azerbaijan through spot imports. SOCAR Türkiye is the only private sector player bringing in gas to our country from an alternative source. Furthermore, we have engaged in cross-border electricity trade operations with Georgia, Bulgaria and Greece since 2023.

What are the future plans of SOCAR Energy Trade?

SETAS continues to act as a one-stop shop for the energy needs of its customers in Turkiye, offering a sustainable energy supply as well as its energy expertise to become their solution partner in energy. I believe our trade company won this award for its competence in providing its customers with a one-stop shop for energy. Our operations are not solely limited to gas and electricity supply. We act as a solution partner for all needs of our energy-related customers. We aim to update our solutions through continuous development in line with global energy trends.

In addition, at SOCAR Energy Trade, we focus on operations to enhance the value of not only the Turkish supply chain but also the global supply chain. We are planning new strategic steps to increase the added value of our integrated value chain in gas. With the addition of the electricity generation link to our gas value chain and the subsequent trade and cross-border activities, our value chain will be further enriched.

What are the action steps SOCAR Energy Trade takes in terms of sustainability and green energy?

We have renewable power purchase agreements (PPAs) in our own supply portfolio. Moreover, we support our customers in terms of sustainability. To reduce the carbon footprints of end users and make them carbon neutral, we have been selling renewably sourced and I-REC (International Renewable Energy Certificate) certified green energy since 2021. In 2023, SETAS procured green energy to 21% of its end-user portfolio. This year, we intend to ensure that green energy sales make up 25% of our third part portfolio as a minimum.

The post SOCAR Türkiye optimises group benefits through trade: Fuad Ibrahimov appeared first on International Finance.

The most populous Arab country has shifted back to becoming a net importer of natural gas, purchasing numerous cargoes throughout the year and abandoning plans to act as a gas supplier to Europe, following a notable decrease in its domestic gas output.

“The ministry (of Petroleum) is seeking three or four years of supply to hedge from sudden price increases. It is also seeking to include a flexibility clause as the government hopes it could maybe find gas sooner or doesn’t need that much gas,” the first industry source said, as reported by Zawya.

Cairo is primarily engaging in negotiations with American corporations and investment firms that have American sales agreements, due to their adaptability being superior to other producers, as mentioned by two other trading sources.

Furthermore, Egypt, which paid a premium of USD 1 to USD 2 for its LNG purchases earlier this year, is expected to issue a tender seeking up to 20 LNG cargoes to meet its demands for the first quarter of 2025, as per the information provided by these sources to Reuters in October.

LNG spot prices have recently increased to around USD 14.50 per million British thermal units (mmBtu), rising from approximately USD 12/mmBtu when Egypt commenced tendering for LNG. This price escalation is resulting in higher expenses for new cargo shipments during a period when Egypt is experiencing a foreign currency crisis.

The initial report suggests that Egypt is laying the groundwork for gas imports in both Ain Sokhna and Alexandria. Data analytics company Kpler reported recently that Egypt was planning to add a second floating storage regasification unit (FSRU) at the beginning of the coming year.

The post Egypt in talks with foreign companies over long-term LNG purchases appeared first on International Finance.

Media reports also stated that the Egyptian Natural Gas Holding Company (EGAS) has already received shipments of LNG totalling over 213,000 tonnes, which it processed and connected to the country’s gas network.

In July 2024, he disclosed, EGAS received two shipments of LNG totalling 143,000 tonnes and one additional shipment of 70,000 tons.

The Egyptian government contracted the Hoegh Galleon freighter to convey the latter, according to the source. With this, there will be about 213,000 tons of LNG imported overall.

The official stated that the gas is dispersed in different amounts between power plants and the industrial sector. The official stated that these arriving LNG cargoes are intended for the Port of Ain Sokhna, where they are regasified and injected into the national gas network.

In addition, the source stated recently that the Port of Ain Sokhna received a supply of liquefied petroleum gas (LPG).

He went on to say that this LPG, which is made in refineries from butane and propane, was transported on a ship flying the flag of Liberia and is presently being unloaded at the oil docks in the Ain Sokhna region.

To guarantee no interruptions during the summer, the Egyptian government committed an extra USD 1.18 billion in June for LNG and mazut supplies.

Egypt is ramping up LNG imports as its own natural gas production falls and power demand climbs over the summer period, according to industry sources and data.

“Returning to imports would reverse the most populous Arab country’s position as a natural gas exporter in recent years as part of a plan to become a reliable supplier to Europe,” stated a Reuters report.

Egypt’s government has bought at least two LNG cargoes in April 2024 for immediate delivery and is expected to purchase up to 20 over the spring and summer in readiness for increasing power demand, three industry and trading sources told the media outlet.

Egypt, which faces growing demand for gas from its population of 106 million, is expected to buy three cargoes per month between July and October 2024, regional media outlets reported.

“The government has been seeking a regional supply role, selling Egypt’s own gas and re-exporting Israeli gas as LNG to the Middle East, Africa and Europe. Although it turned into a net exporter from a net importer after the discovery of the giant Zohr gas field in 2015, there have been few large discoveries since and production at the field has fallen partially because of water infiltration issues,” analysts and industry sources noted.

Hamdy Abdelaziz, a spokesman at Egypt’s petroleum ministry, recently noted that the LNG production drop was due to the “natural decline of discovered wells,” adding that this is expected to be offset by new wells being drilled in the field.

In 2023, Egypt’s total natural gas production fell to its lowest since 2017, figures from the Joint Organisations Data Initiative (JODI) show. Gas production in 2023 was around 59.29 billion cubic metres (bcm), falling 11.5% year-on-year to the lowest production level since 2017, when it was around 50.72 bcm.

Egypt has also begun a USD 1.8 billion programme to drill natural gas exploration wells in the Mediterranean Sea and Nile Delta, with the aim of drilling 35 in two years. The country, however, suffered a wave of rolling blackouts last summer, after enjoying a decade of reliable power supplies.

Power cuts have remained in place since, except for a temporary halt during Ramadan and are widely expected to continue throughout the summer.

The post Egypt to receive LNG supplies through Port of Sokhna as summer arrives appeared first on International Finance.

Novatek’s main goal is to develop the Yamal Peninsula, a crucial area for its operations. The company’s flagship project, the Yamal LNG project, is a partnership with major international companies such as TotalEnergies from France and CNPC from China.

This project aims to tap into the extensive natural gas resources in the Yamal region, process them into liquefied natural gas, and export them to global markets. The Yamal LNG project has become one of the largest and most ambitious liquefied natural gas projects in the world, significantly enhancing Russia’s position in the international LNG market.

Apart from Yamal LNG, Novatek has been proactively broadening its footprint in the liquefied natural gas industry via diverse initiatives and collaborations. The business has been investing in the construction of new infrastructure and LNG facilities and is renowned for its creative use of liquefaction technology. In order to diversify its revenue sources and improve its competitiveness in the global energy market, Novatek has also been looking into opportunities in downstream industries, such as petrochemicals.

Novatek has proven to be resilient and adaptable in navigating the challenging terrain of the energy industry, even in the face of obstacles like geopolitical tensions and regulatory uncertainties. Due to its dedication to sustainable development, operational excellence, and technological innovation, the company has established itself as a major player in the global energy transition. Novatek is still a major player in determining the direction of the natural gas sector and propelling economic growth in Russia and abroad with its aggressive expansion plans and astute investments.

The brain behind this successful venture is 68-year-old Leonid Mikhelson, Russian-Israeli billionaire businessman, CEO, chairman and major shareholder of the company.

Who is Leonid Mikhelson?
• Leonid Mikhelson was born on 11 August, 1955 in the Russian city of Kaspiysk
• He completed his graduation in Industrial Civil Engineering from the Samara Institute of Civil Engineering in 1977
• After his graduation, Leonid Mikhelson started working as a foreman at a construction and assembling company in the Tyumen area of Siberia
• He was appointed as a Chief Engineer of Ryazantruboprovodstroy in 1985, and in 1987, he became General Director of Kuibishevtruboprovodstroy, which was renamed NOVA in 1994
• The same year, Leonid Mikhelson then became General Director of its holding company, Novafinivest, which later became known as Novatek
• He was Chairman of the Board of Directors for OAO Stroytransgas and OOO Art Finance, from 2008 until 2010
• Other than being the director of companies, Leonid Mikhelson owns 57.5% interest in Sibur
• He also holds a 25% stake in Novatek, and he also owns a megayacht, Pacific
• Leonid Mikhelson is the founder of the V-A-C Foundation, which supports modern Russian art and maintains connections with the Tate Museums in the United Kingdom, the New Museum in New York, and the Whitechapel Gallery in London
• In 2012, he was listed as the second-richest Russian in several articles including Bloomberg
• According to Forbes, as of 2024, Leonid Mikhelson’s net worth is around 2,900 crores USD

Novatek Sets Up China Office

Meanwhile, Novatek is assembling a new team in China to investigate marketing the fuel, despite US sanctions impeding plans for exports from its new, multibillion-dollar Arctic project. The action demonstrates how Russian energy companies have continued to shift their focus to Asia, particularly, China, since the conflict in Ukraine closed off their access to European markets.

Following the imposition of US sanctions, Novatek may be able to find buyers for Arctic LNG 2, its most recent LNG project, with the assistance of a China operation. Experts say that Novatek, the biggest LNG producer in Russia, has been assembling a business development and marketing team in Beijing in recent months.

US sanctions were imposed in November 2023 on Arctic LNG 2, a project that was supposed to begin operations in 2024 as part of Russia’s goal to become the world’s leading supplier of LNG. Shipments would not be delivered, as advised by Novatek and its partners, including TotalEnergies of France, to China’s Shenergy Group, Zhejiang Energy, and Spain’s Repsol.

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Today’s exports are over 40 times higher than in 1913. Looking at changes in trade relative to GDP offers another intriguing perspective because the global economy has had consistent positive growth over the past couple of centuries.

Less than 10% of the world’s output up until 1870 came from exports on a global scale. The value of commodities shipped globally today is very close to 25%. This demonstrates that international trade has increased more than proportionately throughout the last century of economic expansion.

With every passing year, global trade grows faster and more robust. In the modern global economic system, nations trade final goods and intermediate inputs. This results in a sophisticated global network of financial relationships.

Trade volume in 2023

WTO economists are now projecting merchandise trade volume growth of 1.7% in 2023, up from October 2022’s estimate of 1.0%, accompanied by real GDP growth of 2.4% at market exchange rates.

Growth rates for trade and output for the year 2023 are expected to be below their respective averages of 2.6% and 2.7% for the 12 years since the trade collapse that followed the global financial crisis.

Trade growth should rebound to 3.2% in 2024 as GDP growth picks up to 2.6%, but this estimate is more uncertain than usual due to the presence of substantial downside risks, including rising geopolitical tensions, global food insecurity, the monetary policy tightening fallouts, risks to financial stability, and increasing levels of debt.

Goods trade was more resilient than expected throughout 2022, despite the Ukraine war fallouts. Year-on-year merchandise trade volume growth averaged 4.2% in the first three quarters of 2022 before a 2.4% decline in the fourth quarter dragged growth for the year down to 2.7%.

The final result for 2022 was weaker than the WTO’s October forecast of 3.5% but close to the earlier estimate of 3.0% from April, which relied on simulations to gauge the economic impact of the war. A 2.7% increase in trade volume in 2022 is consistent with the WTO’s initial report on the Ukraine crisis, which estimated that trade growth for the year would fall somewhere between 2.4% and 3.0%.

The final figure ended up being within this range and well above the most pessimistic scenario considered in the report, which would have seen trade growth of just 0.5% if countries had split into competing trade blocs.

Fragmentation has mostly been avoided, but it remains a significant threat that could hinder economic growth and reduce living standards over the long term. The fact that worst-case scenarios were avoided in 2022 should not be a cause for complacency. Several factors contributed to the trade slump in the fourth quarter of 2022, the most conspicuous being the rise in global commodity prices. Although food and energy prices had receded from their post-conflict peaks, they remained high by historical standards and continued to erode real incomes and import demand.

Energy prices

The impact of energy prices was most decisive during the European winter, when gas supplies from Russia were almost cut off. High food prices were also felt in Middle Eastern and African countries that relied heavily on imports from Ukraine and Russia.

On a more positive note, a WTO follow-up study marking one year of the Ukraine war found that vulnerable economies could find substitute products and suppliers to obtain essential food supplies. This response might not have been possible without an open and inclusive multilateral trading system to anchor the global economy. Rising COVID infections also significantly impacted the Chinese economy in the 2022-23 fourth quarter, where GDP growth dropped to 0.0%, and exports fell to 6.5%.

This decline may be reversed to China’s advantage in 2023. The relaxation of COVID controlling measures is expected to unleash pent-up consumer demand in the world’s second-largest economy, which could boost international trade, particularly in travel-related services.

Finally, interest rate hikes in advanced economies may have succeeded in cooling demand. Still, they have also revealed weaknesses in banking systems that could lead to broader financial instability if left unchecked.

Inflation and rate hikes

After years of expansionary monetary policy, central banks find themselves struggling to strike a balance between taming inflation, sustaining economic growth, and maintaining financial stability. A miscalculation could have negative consequences for the global economy and trade.

Reversing the course on low-interest rates would take a lot of work, and the road ahead will likely be bumpy. Recent bank failures in the United States and Europe highlight the possible existence of further vulnerabilities stemming from a changed interest rate environment.

Upside surprises in inflation could raise the prospect of more extensive rate hikes, but these would come at the risk of broader financial contagion that would reduce output and trade.

Governments and regulators must be alert to these and other financial risks in the coming months. Geopolitical tensions, inflation, commodity prices, and the lingering effects of COVID were the main factors affecting trade and industrial output in 2022. The same year also saw some of the highest inflation rates since the 1980s, massive swings in commodity prices, and an appreciation of the US Dollar. Since strong price movements tend to distort trade statistics in value terms, it makes sense to focus on trade volumes when forecasting trade.

Commodity price fluctuations strongly influenced inflation and trade volumes in 2022. These swings were extreme for European natural gas prices, which rose 48% between January and August of 2022 before falling 76% by February 2023.

Unlike oil prices, which tend to be strongly correlated across regions, natural gas prices commonly diverge considerably. Regional gas prices might eventually equalize due to increased trade in liquified natural gas (LNG), but for the time being, pipeline and shipping infrastructure are preventing this convergence.

European countries responded to the loss of gas shipments from Russia by importing more from other suppliers, including the United States, Qatar, Norway, and Algeria. This has increased LNG prices elsewhere, including in Japan, where its price doubled between January 2022 and February 2023.

What about core inflation?

Europe was fortunate to have a mild winter in 2022, which prevented energy prices from rising even further. However, if European countries cannot secure sufficient natural gas supplies for next winter and if the weather is colder, prices could spike again. Prices of food commodities also fluctuated strongly throughout 2022, jumping 19% between January and May before falling 15% between May and December.

For the year, food prices were up 18% compared to 2021, including a 21% rise in grain prices. Prices of fertilizers registered an even more considerable year-on-year increase of 63%. Higher food prices should encourage more agricultural production, resulting in greater availability and lower future food prices.

On the other hand, less land under cultivation and the high fertilizer cost could lead to reduced crop yields and higher prices. Declining food and energy prices have helped bring down headline inflation in developed economies, but the core one remains stubbornly high.

According to OECD statistics, headline inflation in the United States dropped from 9.1% last June to 6.0% in February 2023, but core inflation only fell from 6.6% in September to 5.5% in February.

Similarly for the European Union, headline inflation dipped from 11.5% in October 2022 to 9.9% in February 2023, while core inflation climbed, reaching 6.6% in February. This suggests that monetary policy control has failed to tame inflation and that interest rates may have to stay high longer to have their intended effects.

The 10.4% quarter-on-quarter decline previously recorded for exports from the CIS3 region in Q2 of 2022 has since been revised to a 3.0% drop, which suggests that Russia has been able to find new markets for its goods despite the sanctions. This revision had a strong impact on the estimated exports of the Middle East, which were expected to greatly increase to make up for shortfalls in supplies of Russian energy.

Africa was also expected to export more significant goods than it ultimately did. However, the US Dollar value of the region’s exports did increase sharply (nearly 18%) due to higher commodity prices.

Exports and imports

Exports from North America, South America, and Europe were broadly in line with expectations, while shipments from Asia were considerably weaker due to a sharp drop in exports in the 2022-23 fourth quarter.

Imports from the CIS region are estimated to have plunged 20.4% in the second quarter of 2022, but they recovered more quickly than expected in the year’s second half. Unfortunately, being confident about these figures is difficult due to a lack of official data.

Russian trade statistics have been unavailable for many months, but estimates based on the statistics of trading partners provide a reasonable approximation. All other regions’ imports declined in volume terms in the fourth quarter of 2022 due to reduced domestic demand or, in some cases, reduced export revenues as commodity prices eased. Global food supplies are less precarious than many had feared at the start of the Ukraine war, but they remain a cause for concern.

The average price of wheat rose 44% year-on-year during this period, while the value of traded grain increased by 31%. This implies a decline of around 7.5% in the volume of world wheat trade. This may not have disastrous consequences if consumers in all countries, including the poorest, can import sufficient quantities of wheat or some close substitute.

However, there is little margin for error if a major producer suffers a crop failure or climate-related natural disaster. Such an event could precipitate a more severe food crisis requiring increased trade. Fortunately, countries have accessed alternative sources of supply so far.

For example, between January and October of 2022, Ethiopia’s wheat imports from Russia and Ukraine were 75% and 95%, respectively, compensated by increased shipments from the United States and Argentina. There are some signs of a trade turnaround in early 2023. The JP Morgan global purchasing managers’ index (PMI) returned to its baseline value of 50 in February 2023, suggesting accelerating global output growth.

The new export orders sub-index, more directly predictive of trade volumes, has also risen but remained below the baseline value in February at 48.3, suggesting continued trade contraction but at a slower rate. However, preliminary PMIs for the United States and the euro area in March 2023 point to a more robust demand recovery, which would boost trade and stoke inflation.

Falling input and output price sub-indices in the PMI indicated that inflationary pressures appeared to be easing. Sub-indices representing delivery times and stocks of finished goods also returned to normal in February 2023, suggesting that supply chain issues mainly had been resolved.

The projected 1.7% increase in the volume of world trade in 2023 is more substantial than the previous estimate of 1.0% from last October, but it is still relatively weak. A slight increase in the consensus estimate of global GDP growth in 2023 from 2.3% to 2.4% helps to explain the discrepancy between the two estimates. This modest change at the worldwide level masks significant shifts between regions, most notably between Europe and Asia. 0.7% points have revised Europe’s expected GDP growth, while 0.4% points have revised Asia’s. More robust than expected GDP growth in Europe would stimulate intra-EU trade, which gives Europe extra weight in world totals. Europe’s exports are projected to grow by 1.8% in 2023, up from the previous estimate of 0.8%.

Europe’s imports are expected to decline by 0.6% in 2023, less than the previous estimate of -0.7%. It should be noted that the region “Europe” includes Ukraine, whose exports and imports fell precipitously in 2022 (33% and 23%, respectively) and have yet to recover.

North America is expected to record the most vigorous merchandise export growth of any WTO region in 2023 (3.3%), followed by the CIS (2.8%), Asia (2.5%), and Europe (1.8%). Weaker export growth is expected in the Middle East (0.9%) and South America (0.3%), while Africa’s goods exports are expected to decline (-1.4%). The relative strength of CIS exports is partly due to a reduced base in 2022 when shipments fell sharply (-4.9%).

The region is expected to record the fastest import growth of any part in 2023 (14.9%) for the same reason, with purchases having fallen 13.5% in the previous year, followed by Africa (5.6%) and the Middle East (5.5%), whose export volumes have been boosted by increased revenues from exports of natural resources.

Imports from North America, South America, and Europe are all expected to contract in 2023 (by -0.1%, -1.6%, and -0.6%, respectively) due to weaker domestic demand. In 2024, trade and GDP growth are expected to grow at rates of 3.2% and 2.6%, but these figures should be interpreted with caution since they are highly dependent on the course of the war in Ukraine.

Other significant risks to the forecast include resurgent inflation, slowdowns in major economies, and geopolitical tensions. Most serious would be a food crisis triggering widespread hunger and starvation in low-income countries. Wealthy countries need to be on the lookout for signs of such a crisis and take steps in advance to prepare for it.

In conclusion, the integration of national economies into a global economic system has led to a significant increase in international trade, with today’s exports being more than 40 times higher than in 1913. However, the global economic system faces many challenges, including rising geopolitical tensions, global food insecurity, the possibility of unforeseen fallouts from monetary tightening, risks to financial stability, and increasing levels of debt.

Despite these challenges, the WTO predicts an increase in trade volume growth of 1.7% in 2023, up from last October’s estimate of 1.0%, accompanied by real GDP growth of 2.4% at market exchange rates. As such, countries need to remain vigilant and take necessary steps to prepare for potential crises. A global network of financial relationships and an open and inclusive multilateral trading system can anchor the global economy and help mitigate the effects of such crises.

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Further breakdown of these growth figures only boosts Saudi’s efforts of diversifying and strengthening its economy (along with cutting down its dependence on oil trade) under the ‘Vision 2030’ plan. While the energy sector contributed some 32.7% in the latest GDP upswing, it was followed by government services (15.2%), manufacturing activities except oil refining (8.6%), and wholesale and retail trade, restaurants and hotels (8.2%).

Breaking down the stats
Saudi Arabia’s economy grew by 5.5% in the 2022 fourth quarter. Non-oil activities for the October-December period jumped 6.2%, whereas energy activities grew by 6.1%.

Saudi government also expanded its services by 2.9%. Transport, storage and communication activities recorded the highest yearly growth rates of 13.1%, followed by community, social and personal services (10.5%), other mining and quarrying activities (8.4%), and crude petroleum and natural gas (7.2%).

The Kingdom’s GDP at current prices stood at over 1.02 trillion riyals (USD 272.75 billion) in the 2022 fourth quarter.

The 2022 fourth-quarter GDP growth was Saudi’s seventh consecutive three-month expansion after its slowdown due to COVID. And most importantly, all activities within the Kingdom’s economic framework have achieved positive growth rates.

Crude petroleum and natural gas activities achieved the highest annual growth rates of 16.1 per cent, followed by transport, storage and communication (9.1 per cent), and petroleum refining (8.3 per cent).

The Kingdom’s GDP at current prices amounted to more than 4.15 trillion riyals last year.

The crude petroleum and natural gas activities contributed 32.7% to the Saudi economy. The Kingdom’s preliminary estimates for 2023 indicate a GDP growth of 3.1%, whereas the International Monetary Fund (IMF) expects it to grow by 2.6% this year and by 3.4% in 2024.

Activities in Saudi’s non-oil economy hit an eight-year high in February 2023. Riyad Bank’s Purchasing Managers’ Index for the Saudi economy rose to 59.8 in February 2023 from 58.2 in January, thus recognizing the Kingdom’s fastest growth in the arena of non-oil private sector businesses since March 2015.

The country’s inflation rate for 2022 was estimated at 2.6% and, according to the latest preliminary forecasts, is expected to hit 2.1% in 2023, suggesting that the Kingdom is performing sufficiently on this front as well, when developed economies like the United Kingdom and the United States saw neck breaking inflation last year.

The success story
In March 2023, Saudi Downtown signed a pact with the country’s Small and Medium Enterprises General Authority, also known as Monsha’at, to develop projects in 12 cities around the Kingdom.

The agreement will create business opportunities for the Kingdom’s SME sector in line with the goals of ‘Vision 2030’, reported the Saudi Press Agency.

Saudi Downtown, a wholly-owned subsidiary of the Saudi Public Investment Fund (PIF), will establish urban centres of sustainable economic and social impact in 12 cities across the country.

Another focus area for the Saudi government has been the tourism sector. In the recently concluded ITB Berlin (world’s largest trade fair for the global tourism industry), Ahmed Al-Khateeb, Saudi minister of tourism, not only opened the Saudi pavilion, which received a number of presidents, ministers, leaders, and other key officials, but also interacted with major commercial bodies such as TUI Group and FTI Consulting, apart from the UN World Tourism Organization and the World Travel and Tourism Council. Saudi had the largest space in the trade forum, and its line-up of interactive content not only impressed industry stakeholders, but also helped the Kingdom to seal strategic agreements with UNWTO, Expedia Group, FTI Consulting, DER Touristik, Hotelbeds, and Lufthansa City Center.

The Kingdom recorded 93.5 million visitors in 2022 and is now eyeing to receive 100 million tourists annually by 2030. Saudi Arabia, which is the largest investor globally in the tourism sector, has already allocated USD 550 billion to realize the above goal, as per reports.

And in a further boost to the economic diversification efforts of the Kingdom, the non-oil foreign trade between the UAE and Saudi Arabia jumped 70% over the last ten years, hitting 136 billion dirhams (USD 37 billion) by 2022 end, as per the statistics from the UAE Federal Competitiveness and Statistics Center.

Property & aviation sectors leading diversification efforts
From March 7-10 2023, the Kingdom hosted its Restatex Riyadh Real Estate Exhibition, which witnessed the launch of real estate funds with a total value of more than SAR 4 billion (USD 1 billion), aimed at providing over 4,000 housing units in Riyadh and Madinah on an area of over one million square meters, thus keeping pace with the property sector’s growth targets for ‘Saudi Vision 2030’.

As per PricewaterhouseCoopers (PwC), Saudi Arabia’s housing demand, which was at 99,600 homes in 2021, will increase by over 50% to reach 153,000 houses by 2030. The Kingdom has swiftly acted as per the challenge, by signing up agreements worth over 10 billion Saudi riyals (USD 2.66 billion) to set up four investment funds to fast-track the country’s property projects. Global ratings agency S&P predicted in 2022 that the Kingdom will see sustained growth in its property market, fuelled by ‘Vision 2030’ and the Iskan programme, with USD 1 trillion slated for real estate and infrastructure projects.

The market will witness a massive boom by 2033, as the government draws up more and more high-ticket projects and gets attention from global property market players.

“Investors who want to buy real estate understand that if someone committed to invest [that much] in the country it’s going to be growing. Saudi has a lot of potential for the next ten years … and the next ten years is going to be the greatest time for [the] Saudi property market,” Alex Galtsev, CEO of Dubai-based property technology company Realiste told Al Arabiya English, while giving his insights on the Saudi’s property sector boom.

Investcorp Holdings, one of the largest asset managers in the Middle East, will invest USD 1 billion in the Saudi property market over the next five years.

Also not to forget about the creation of a futuristic city called NEOM. This occupies the centre stage of the Saudi real estate sector’s roadmap for ‘Vision 2030’. The city’s main attraction point will be the luxury island called ‘Sindalah’, which will reportedly rival tourist destinations like Monaco and Athens, with vibrant and world-class marina and yacht clubs.

Dubai Marina and Jumeirah Village Circle have already established themselves as real estate investment destinations within the Kingdom. And the first two months of 2023 have been bumper ones for the sector as property demand in Dubai hit a record high. In February alone, Dubai’s residential market saw 8,515 transactions, a whopping 43.9% increase from 2022. January and February of 2023 together clocked a total of 17,741 residential transactions, a new record.

Shifting the focus from the property sector, let’s explore the Kingdom’s aviation sector. Crown Prince Mohammed bin Salman announced the creation of a new national airline called ‘Riyadh Air’, with industry veteran Tony Douglas being its chief executive, In march 2023. The airline, owned by Saudi Arabia’s Public Investment Fund (PIF), is expected to contribute significantly to the Kingdom’s economic diversification, by adding USD 20 billion to the GDP, apart from creating over 200,000 jobs, while reportedly serving over 100 global destinations by 2030.

The country’s aviation sector has been working aggressively towards localizing jobs. In 2021, General Authority of Civil Aviation (GACA) launched an initiative of localizing around 10,000 jobs. Saudi Arabian Airlines has recently ensured that the majority of its pilots are from the Kingdom, while several other carriers are poised to follow similar moves, which will generate more employment for qualified Saudi professionals in the field of aviation.

King Abdulaziz International Airport’s infrastructures have been expanded to USD 7.2 billion, while the Kingdom’s Minister of Transport and Logistics Saleh Al Jasser revealed his government’s plans of investing approximately USD 133 billons by 2033 in the aviation sector, keeping in mind the country’s goal of hosting 330 million tourists by 2030.

NEOM Bay Airport received its first flight in 2019 and has already been classified as a commercial hub by the International Air Transport Association (IATA). King Salman International Airport is another upcoming big-ticket project, which will be operational by 2030 in Riyadh. The facility will have six runways, apart from possessing the capacity for hosting 120 million travellers yearly.

The world taking note
World Bank’s Vice-President for the Middle East and North Africa Ferid Belhaj recently urged the countries within his jurisdiction to emulate Saudi Arabia’s economic diversification model. He, while noting the impressive growth trajectory of Saudi’s non-oil sector, emphasized that the model has showcased a “new economic and development approach, breaking free from patterns that no longer hold good.”

Moody’s too noted that Saudi’s non-oil sector has become the main driver behind the Kingdom’s economic growth.

“This is (the growth of the non-oil sector) largely due to the Saudi government’s efforts to diversify the economy by carrying out structural reforms, including the introduction of taxation, modernisation of regulatory systems, as well as infrastructure improvements. These reforms have led to increased foreign investment, which has stimulated economic growth and contributed to job creation. The report also highlights that accelerated private sector growth in recent years has helped improve fiscal revenues,” the ratings agency said.

The growth of the Middle East’s non-oil economy will continue to progress into 2023 as the GCC economies continue to diversify, Riyadh Al Najjar, PwC Middle East Chairman of the Board & KSA Country Senior Partner, informed Zawya, a statement which further solidifies the fact that Saudi’s economic diversification efforts, which have proven to be game-changing ones, have steadily been emulated by its Gulf neighbours as well.

When the world was undergoing an economic slowdown in 2022, Saudi defied the trend and continued its bold march towards realising the goals of ‘Vision 2030’. The GCC is undergoing a transition phase, where they are focussing more on economic diversification and sustainable development. The Saudi model gives them a roadmap for how to achieve a sustainable economy.

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