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The rise in low-carbon capex

Key investment areas

The report identifies four key strategic areas receiving sizable investments to facilitate the energy transition:

  1. Natural gas expansion – Gradually phasing out oil usage in power generation through higher natural gas and renewables capacities. Estimated investments of US$165-175bn through 2030.
  2. Renewable energy – Ambitious capacity targets across the region imply investments of US$190-212bn to achieve over 85GW of additions by 2030-35.
  3. Carbon sequestration and clean fuels – Focus on scaling up carbon capture and capitalizing on low-cost positioning. Estimated investments of US$141-155bn.
  4. Infrastructure and logistics – Supporting the energy transition with investments in transportation, gas pipelines, shipping, and logistics estimated at US$112bn.

Natural gas investments

Countries are expanding both associated and non-associated gas production to increase supply. Key projects include Saudi’s Jafurah field (US$83-91 bn estimated spend) and Qatar’s LNG expansion projects (US$50bn). The UAE aims to invest US$32-34bn on projects like Hail/Ghasha.

Renewable energy targets

The region enjoys high solar resources and aims to add over 85GW of capacity by 2035 based on country targets. Key targets include Saudi’s 58.7GW by 2030 and the UAE’s 19.8GW by 2030. Investments are estimated at US$190-212bn to achieve these.

Carbon sequestration

CCUS capacity is expected to scale up over 14x to 65mtpa by 2035. Saudi, Qatar and the UAE are leading projects that could see US$20bn spent through 2030 and more post-2030. Power generation is a major opportunity.

Clean hydrogen

Countries like Saudi, Oman and the UAE are targeting sizable production – over 50% of Europe’s 2030 target. Investments of US$97-106bn are estimated through 2030/31 to achieve announced plans.

Infrastructure investments

Logistics capabilities are being expanded across ports, shipping, pipelines. The UAE alone plans over US$4bn in spending. Estimated total investments in the sector are US$112bn to support decarbonization goals.

Conclusion

The report estimates total investments of US$608-654bn could be required across the four strategic areas to help achieve key decarbonization milestones and energy transition goals in the GCC. Upside potential exists as targets are revised upwards over time.