AFRICA-MIDDLE EAST GAS POTENTIAL: A WESTERN ALTERNATIVE?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00851R000200090005-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 20, 2016
• Document Release Date: February 1, 2007
• Sequence Number: 5
• Publication Date: August 1, 1982
• Content Type: REPORT

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 Directorate of Top Secret
Intelligence
A Western Alternative?
Africa-Middle East Gas:
Top Secret
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August IYarZ
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Directorate of Too Secret
Intelligence
Africa-Middle East Gas:
A Western Alternative?
This assessment was prepared by
Strategic Resources Division, Office of Global Issues.
Comments and queries are welcome and may be
directed to the Chief, Energy Issues Branch, OGI, on
STAT
Top Secret
ugus
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Affrica-Middlle East Gas:
A Western Alternative?
Key Judgments Several African and Middle Eastern countries have the potential to sharply
Information available increase gas exports. Although little growth in exports is likely during the
as of 16 August 1982 1980s, sales could surge during the 1990s. Under the most favorable
has been used in this report.
circumstances, new projects could yield gas exports of 2.5 million barrels
per day oil equivalent (b/doe) by the mid-1990s. 25X1
We think the best that can be expected, however, is an increase in exports
of 750,000 to 1 million b/doe. For even these levels to materialize, Western
purchasers must be willing to pay prices at least 10 to 15 percent hi her
than the price of Soviet gas under recently negotiated contracts
Despite the optimism for substantial supplies
25X1
I Iwe believe several factors will inhibit, and may preclude, develop-
ment of more than half of the potential gas supplies from these regions: 25X1
Gas supplies from Africa and the Middle East would be costly to develop
and would face stiff competition in the European market from Soviet and
Norwegian gas. 25X1
o Even if gas supplies could be procured at a favorable price, many
importers would be wary of dependence on many of these producers
because of the security risks.
Rapidly rising domestic demand for gas-particularly as a feedstock for
petrochemicals, fertilizers, and electric generation-would lessen sup-
plies available for export.
Technical problems such as laying pipeline through hazardous terrain or
deep water and poor field or facility development would limit the scope of
some projects.
A desire to maximize oil and natural gas liquid production-mainly
through gas reinjection and cycling-would reduce gas availability from
some countries such as Algeria and Iran.
Because of a combination of high investment costs and long transport
distances for many of these projects, consumers must be willing to pay
slightly higher prices for gas supplies from North Africa and the Middle
East as well as from the North Sea. Based on our analysis 25)
I lof the cost of these projects, we believe the delivered
price frc new gas suppliers will be 10 to 15 percent higher than the price 25X1
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August 1982
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of Soviet gas under recently signed contracts. Even if the Europeans are
willing to pay some premium for security, Moscow's need for hard
currency and willingness to accept low prices will force new suppliers from
Africa, the Middle East, and the North Sea to compete aggressively on
price to capture a larger share of the market.
Development of the Africa-Middle East export capability, which we
believe could reasonably be expected to occur, would provide the additional
supplies needed to eliminate the need for additional Soviet gas supplies in
the 1990s. In that case, Soviet exports to Western Europe by the end of the
decade could be limited to the 900,000 b/doe already under contract
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Gas Supply Outlook 8
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Markets for Gas
1978-90. We expect the falloff in West European gas
consumption-an unprecedented 8 percent over the
past two years-to end this year as economic recovery
begins. We estimate that demand for gas in continen-
tal Western Europe will increase from 2.8 million
b/doe in 1980 to about 3.4 million b/doe in 1990 and
3.7 to 4.0 million b/doe by the year 2000. Most West
European gas utilities plan to meet projected demand
through 1990 from domestic production and imports
they have already lined up
Based on contracts in train, West European gas
buyers expect sizable new supplies from Algeria and
the Soviet Union. Should sanctions or unforeseen
political events preclude expected increases in Soviet
or Algerian gas deliveries, the West Europeans could
still balance supply and demand through the decade
by a more rapid depletion of domestic reserves. How-
ever, the economic and political decisions necessary to
bring this about would require a major reversal of
existing policies and a sharp acceleration of North
Sea development. Deliveries of North Sea gas are
projected to expand only slightly under current plans.
1990-2000. West European gas import requirements
will continue to rise beyond 1990. Based on our
analysis of recent industry projections, import needs
could increase to 2.3 to 2.8 million b/doe by 2000.
Japan's import demand will probably grow rapidly
also in the 1990s. Although Japan has contracted for
amounts from Alaska, Brunei, UAE, and Indonesia
and has several pending contracts with Southeast
Asian, Canadian, and Soviet producers, Tokyo will
still need additional gas during the late 1990s
Several major suppliers have the potential to fill
incremental gas needs in Western Europe and Japan.
Among these sources are the North Sea, the Soviet
Union, Africa, and the Middle East:
I orth Sea reserves
Figure 1
Continental Europe: Natural Gas
Supply and Demands
0 1980
a Western Europe excluding the United Kingdom. UK gas supply and
demand account for about an additional 700,000 to 1 million b/doe.
25X1
supply but at premium prices.
need for hard currency earnings, will vie for as large
a share of the gas market as possible.
North African and Middle Eastern producers are
viewed by West European and Japanese govern-
ments and utilities as potential suppliers because of
their large reserve base and, in some cases, proximi-
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D
Figure 2
Japan: Natural Gas and
Demand Forecast
aForecast based on economic growth projections of 5.2
percent until 1990 and 4 percent from 1990 through
2000
Incentives To Export
Declining oil production and the need to find alterna-
tive sources of revenues will be perhaps the greatest
incentive for some African and Middle Eastern coun-
tries to proceed with gas export projects:
indicates that Algeria, Cameroon, Egypt,
and Nigeria will see the most rapid decrease in oil
export capacity-largely a result of limited reserves
and rapidly rising consumption.
? Based on our analysis of existing oil reserves, Qatar,
Iran, UAE, and Libya all have sufficient surplus oil
productive capacity to maintain current rates of oil
production through at least 1995. We believe that
investment in developing new oilfields or upgrading
existing oil facilities would probably provide greater
rates of return in these countries than the develop-
ment of gas reserves at this time. By the early-to-
mid- 1990s these countries nevertheless will proba-
bly have to consider gas exports as a supplement or
alternative to declining oil exports
In addition, we believe that encouragement to proceed
with gas export projects also will come from several of
the politically and economically allied importing
countries who will seek to develop the projects to meet
their gas import needs. Italy, in particular, has active-
ly sought close ties with North African producers,
such as Algeria, Libya, and Egypt. The Italian firm
AGIP has already developed strong commercial inter-
ests in Libya and Egypt. Traditional French/Algerian
political ties have resulted in accommodation on gas
pricing issues, and the French can be expected to take
an active role in the qev m n of any as export
project in Cameroon.
25X1
Based on increasing levels of trade, we believe that
Japanese commercial interests in the UAE and Qatar
would favor development of new export projects in
these countries provided the gas were competitively
priced. In addition, with the recent Japanese agree-
ment to renew construction of Iran's largest petro-
chemical facility, other commercial and industrial
projects, including a liquid natural gas (LNG) project,
could also go forward again. The West German firm
Wintershall has a large commercial stake in the
North Dome field in Qatar that could encourage
West Germany to consider LNG or pipeline imports
from the region if favorable pricing arrangements
were available. However, recent price demands by
Qatar have at least postponed consideration of the
LNG project
The Gas Supply Potential
fiddle East
(OPEC) and African ort west and Sub-Saharan)
gas reserves total about 885 trillion cubic feet (tcf)
equal to 150 billion barrels oil equivalent (boe). Iran,
Algeria, Qatar, Saudi Arabia, and Nigeria account
for about 85 percent of the reserves. Roughly half of
the total reserves are in fields not associated with oil
production-the largest of which are Hassi R'Mel
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Figure 3
Africa: Proposed Natural Gas Export Projects
Hassi
R'mel
Algeria
Trans-Sahara
Jatural Gas Pipeline
(alternative routes)
Ivory
Coast
Upper
Volta
'ribi
Central African
Republic
South
Africa
Benin
Togo Ni
hana1
Rwanda
Buru, di
?Malta t`'~ t V Cyp+~rs`
Mediterranean Sea Lebano
Caspian
Sea
Bahrain
tar
Existing LNG facility
Proposed LNG facility
0 Natural gasfield
- Existing pipeline
- Proposed pipeline
0 1000
Kilometers
Boundary representation is
not necessarily authoritative.
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(Algeria), Pars (Iran), and North Dome (Qatar). Each
of these fields has reserves close to 100 tcf or 20
billion boe. Because nearly all of the gas currently
being flared will eventually be used domestically
(either through reinjection or as a fuel or feedstock),
most of the proposed gas export projects will use
reserves in nonassociated fields.
potential African suppliers-Algeria, Cam-
eroon, Egypt, Libya, Nigeria, and Ivory Coast-could
deliver as much as 1.6 million b/doe annually of
additional gas supplies to Western Europe by the
early 1990s. oten-
tial Middle Eastern suppliers-UAE, Qatar, and
'Iran-could deliver an additional 750,000 b/doe an-
nually, mostly to Japan. Pricing policies and financial
and technical constraints, however, are likely to cause
total gas supplies available from these countries to fall
considerably below these levels
some countries, such as Egypt
and the Ivory Coast, have yet to find large enough
reserves to support proposed LNG projects. Moreover,
the reserves found may be sufficient to meet only the
growing domestic requirements.
Several West European importers have argued with
producers that gas should be priced lower than the
level of premium fuels for it to compete in the
industrial market with low-quality residual fuel oil,
currently selling at around $4 per million BTU (f.o.b.).
Although considerable future growth in gas sales will
be in premium markets, such as residential space
heating, importers claim that to generate a demand
for large-scale gas projects, sizable. increments in gas
demand must also come from the industrial sector.
Failure to price gas commensurate with competing
fuels in this sector will limit the amount of additional
gas that can be sold. In addition, Soviet willingness to
compete aggressively in gas pricing to ensure hard
currency earnings will give Moscow a considerable
edge in capturing the West European gas market in
the 1990s, thus limiting exports from countries that
maintain militant pricing policies
Capital Costs and Financial Constraints
The pricing problem is complicated by the high
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capital and delivery costs of some gas projects (table
1). Except for the relatively short-distance, low-cost
trans-Mediterranean gas pipelines from North Afri-
can producers most
LNG and pipeline projects will, at a minimum, cost
Pricing Policy Constraints
Pricing policies of key producing countries will limit
the amount of gas that Western purchasers will be
able and willing to buy. This constraint alone could
take several projects, such as those in Nigeria, Qatar,
and Algeria, out of serious consideration or, at a
minimum, limit their scope.
Several existing and potential gas contracts are al-
ready bogged down in pricing disputes. Algeria has
adopted a militant pricing stance which calls for
basing gas prices on the level of premium fuels-
currently $5 to $5.50 per million BTU at the Algerian
:border. Over the past two years, the Algerians have
suspended or refused to initiate gas deliveries to
France, the United States, and Italy until the pricing
demands were met. Only the French have acceded.
$10 billion for each 280,000 b/doe of capacity. Inter-
est and finance charges can raise this cost sharply,
making some projects marginally economical. For
example, interest on $10 billion borrowed at the 25X1
current average interest rate of 15 percent versus
earlier rates of around 12 percent, would raise total
costs by about $2.3 billion. For each percentage point
decrease in interest, total investment costs would be
lowered by about 8 percent
Delivery costs to Western Europe can also be quite
high for Middle Eastern producers because of the long
distance. LNG would have to be transported 11,200
km around the Cape to Western Europe at a cost of
about $4 to $5 per million BTU. Passage of LNG
tankers through the Suez Canal would shorten the
route considerably but, we believe, may not be possi-
ble because of likely Egyptian concerns over environ- 25X1
mental and safety hazards.
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Soviet Versus Middle East-African Gas:
Competing on Prices
The ability of the Soviets to absorb costs and their
willingness to do so are key factors in giving Moscow
a price edge over other producers. Factors involved in
enabling the Soviets to price gas at or below their
competitors include:
o An ability to acquire other pipeline right-of-way
through their own territory and other Bloc coun-
tries virtually cost free.
o Subsidized interest rates on Western loans, includ-
ing a grace period until payback is required.
c Not having to lay out hard currency for foreign
labor.
As a result, the Soviets can hold hard currency costs
to a minimum. In the case of the Yamal pipeline,
hard currency outlays could be as low as $8 billion.
More importantly, the Soviets are willing to accept
low or even negative returns initially to ensure hard
currency earnings. Because Moscow can afford these
low rates of return, they are willing to price their gas
at levels that guarantee market penetration.
I
25X1
The Middle Eastern and African suppliers, other
than the North Africans, do not have as many of the
advantages the Soviets have in minimizing hard
currency outlays. Only North American producers
can build relatively low-cost pipelines with delivery
costs competitive with Soviet prices, but these coun-
tries-like other African and Middle Eastern pro-
ducers-have been unwilling to accept the lower
wellhead value for gas needed to compete with the
Soviets. Other pipelines such as those proposed from
Qatar and Nigeria must traverse long routes across
several countries, incurring high right-of-way and
transit costs. Since most of these countries do not
have the required domestic skilled labor, the need for
a large foreign labor force will add further to hard
currency outlays. Although subsidized financing and
other credits may be arranged for countries such as
Nigeria and Cameroon, creditworthiness and politi-
cal instability may prevent subsidized financing for
other countries such as Iran.
transport from the Middle East to Europe appears
more economical at $3 per million BTU but trap
fees could easily add another $1 to $2
The multibillion-dollar cost of these gas projects are
forcing Governments in Nigeria, Cameroon, and Qa-
tar to move cautiously in committing resources to
projects that will not pay off for a number of years.
Spending such large sums on gas export projects-
particularly in capital poor countries like Nigeria and
Cameroon-rather than on agricultural and other
industrial development projects, risks internal politi-
cal criticism. The uncertain market outlook for gas
also imposes risks, paular) since firm contracts
have not been signed. rtic
Technical Constraints
Technical problems may also delay or limit the scope
of some projects. For example, a desire to optimize oil
and natural gas liquids (NGL) production (mainly
through gas reinjection and cycling operations) could
delay production of gas from gascaps and gasfields
with high NGL content.' Presently, Algeria is the
only country involved in a large-scale gas cycling
effort, although Iran is
considering plans to renew the reinjection of massive
volumes of as into several of its oilfields)
' The cycling program removes NGL from produced gas and
reinjects the dry gas into the reservoirs to maximize ultimate NGL
recovery. Without gas reinjection, pressure of the reservoir dro s
condensing and confining some of the NGL within the reservoi
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Figure 4
Middle East: Proposed Natural Gas Export Projects
Caspian
\ Sea
Mediterranea\ Sea Cypr
Egypt
iraq :Saudt Arabs
Neural Zone
Saudi
Arabia
South
Yemen
North
Yemen
Boundary representation is
not necessarily authoritative.
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nited Arab
Emirates
IGAT \
Pipeline Afghanistan
Soviet
Union
Existing LNG facility
Proposed LNG facility
o Natural gasfield
- Existing pipeline
- Proposed pipeline
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Table 1
Africa-Middle East: Estimated Facility
and Operating Costs
Dist
(kil
ance Investment Costs a
ometer) (billion US $)
Operations and
Transport Costs
($ per million BTU)
Arabian Peninsula to Egyptian coast 2,5
70 3.4
1
Egypt-Greece trans-Mediterranean Sea 5
65-925 2.1-4.5
1
Egypt-Italy 1,5
00
1.50
Algeria-Northern Europe 1,5
00
1.50
UAE-Japan 1,2
00
1.05
Arabian Peninsula to Southern Europe via Suez Canal 10,3
00
3.00
Arabian Peninsula to Northern Europe via Cape of Good
a Excludes field development and gas gathering pipelines that range
from an additional $2 to $4 billion per 300,000-b/doe capacity, as
well as interest charges, transit fees, and $0.30 to $0.40 for
LNG plants have been plagued with design flow
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problems, poor maintenance, or insufficient gas feed
to operate normally:
? Algeria has faced delays in construction of gas
feeder pipelines into LNG plants, poorly designed or
installed equipment in several LNG trains, and high
gas losses resulting from low operating efficiencies
of plant operations and equipment.
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? Libya's Brega LNG plant is in poor operating
condition because of poor maintenance and the
relatively old age of the facility.
? Abu Dhabi's Das Island plant has had recurrent
problems with insufficient gas feed and design flaws
in some equipment.
Experience from operating these plants has discour-
aged Algeria, and probably Libya, from undertaking
additional LNG projects and may cause other produc-
ers to rethink their plans for similar facilitiesi
Domestic Consumption
Rapidly rising domestic gas consumption could also
limit supplies available for export. Because net reve-
nues are likely to remain lower for gas than for oil on
an energy equivalent basis, potential suppliers will
probably push development of gas for domestic use to
maximize oil available for export. They may also
favor gas derivative export projects (methanol and
petrochemicals) if the returns are greater than for
LNG or pipeline gas.
Saudi Arabia's master gas plan is an example of
prioritizing domestic use and gas derivative export
projects rather than export of gas. Qatar, Iran, Alge-
ria, Libya, Egypt, and UAE have all more than
doubled their domestic gas consumption in the past
few years and plan for even more rapid increases. We
believe that in Algeria and Iran rising consumption
will likely cut into existing export capacity during the
next several years. The potential for rapidly rising
consumption in Egypt and the Ivory Coast could
prevent exports altogether
Gas Supply Outlook
Development of African-Middle Eastern gas supplies
will hinge on Western Europe's and Japan's desire to
find alternatives to Soviet gas and willingness to pay
prices probably 10 to 15 percent higher than Soviet
prices. Assuming full-scale development of North Sea
reserves and the willingness of the West Europeans
and Japanese to forgo additional supplies of Soviet
gas, we believe African and the Middle. Eastern
I
producers could supply an additional 750,000 b/doe
to 1.0 million b/doe by the mid-1990s:
? Algeria could provide the bulk of these supplies,
perhaps up to an additional 600,000 b/doe above
existing contracts, in the early-to-mid-1990s. Be-
cause current technical problems with its gas cy-
cling program will probably prevent Algiers from
fully meeting existing contracts totaling 613,000
b/doe until the early 1990s, West European custom-
ers may be extremely reluctant to contract for large
additional volumes from Algeria.
? Cameroon will probably provide 75,000 b/doe of
gas by 1990. A proposed LNG project was scaled
back recently because of insufficient reserves, but
construction could begin by 1984 once pricing and
marketing arrangements are settled.
? The UAE will probably expand LNG production by
30,000 b/doe from existing reserves by 1990. It
could increase output another 150,000 b /doe by
1995
? We believe a decline in the amount of oil available
for export will eventually force Nigeria to undertake
a gas export project in the 1990s to meet revenue
needs. Any new facility would probably be consider-
ably smaller than the original Bonny LNG proposal
and could total only 130,000 b/doe.
? Qatar has temporarily postponed plans to export gas
from the North Dome gasfield. We believe Doha
will proceed to develop the field to meet domestic
requirements and may have to reconsider gas ex-
ports as oil production declines in the earl 1990s.
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The search for alternatives to Soviet gas has sparked
a number of proposals by industry groups. Although
most are technically feasible, we believe that few are
likely to come into fruition in the 1990s. Neverthe-
less, several of these projects in countries including
Iran, Egypt, Libya, the Ivory Coast, and Qatar will
continue to draw attention because of their potential
for substantial supplies
We believe Iran could export gas to continental
Western Europe or to Japan, but Tehran's low finan-
cial reserves, outstanding debts, and political insta-
bility under the current regime make financing of a
maior as venture very risky in the near term.
Egypt, the Ivory Coast, and others will consider gas
exports only if sizable new reserves are found. So far,
companies are optimistic about the prospects, but we
believe domestic consumption will prevent significant
gas exports. Libya, on the other hand, could expand
exports from its LNG facility at Brega but with
negligible results because of the poor condition of the
plant. Recent discoveries of sizable offshore gas
reserves in Libya probably will not be developed until
the 1990s, pending development of adjacently located
offshore oilfields.1
Nor are recently proposed Persian Gulf-to-Western
Europe pipeline routes likely to be implemented in
view of Western concerns about the political instabil-
ity in the region and the potentially high cost of the
gas.
On balance, however, we believe that until Te ran s
political situation stabilizes, Iran's gas exports will
be limited to Turkey for domestic use and eventually
some renewed sales to the USSR if a pricing agree-
ment is reached.
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Appendix
Prospects for Gas Projects
Algerian Prospects
Technical problems with the gas cycling program,
delays in developing new fields, and rapidly growing
domestic consumption will probably prevent Algeria
from meeting current export commitments through
1980s.
Algiers will likely maintain
its militant price stance and sell its gas to the highest
bidders. By the late 1980s, however, we believe
declining oil and natural gas liquids production could
force Al iers to soften its gaq ricing stance
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Once southern gasfields are developed and gas rein-
jection requirements diminish by the early 1990s,
Algeria will have the potential to export 1.2 million
b/doe annually. If Algeria maintains its militant
pricing demands or fails to honor existing contract
commitments, customers will be extremely reluctant
to negotiate taking additional volumes of this magni-
tude. At best, Algeria will probably be able to export
an additional 600,000 b /doe above existing contracts.
LNG Projects
LNG projects in Nigeria and Cameroon are likely in
the early 1990s:
? Despite Nigerian failure to proceed with a gas
project because of inability to finance its share of
capital costs, a decline in the amount of oil available
for export will force Lagos to undertake a gas export
project in the 1990s.
both the French and Italians remain
interested in assuming a lead in the project. Any
new facility is likely to be considerably smaller than
the original Bonny LNG proposal, and exports
would total only 130,000-b/d oil equivalent. Propos-
als for a trans-Saharan pipeline, which have sparked
Italian interest, have consistently been dismissed by
Lagos, primarily because of Algerian refusal to
allow total Nigerian control. 25X1
? Cameroon has postponed the start of construction of
the Kribi LNG plant until late 1983 or early 1984,
pending a reevaluation of the project.I
The project will probably be scaled back to
75,000 b/doe. Strong commercial and political ties
with the French and guaranteed construction subsi-
dies will probably ensure the project's implementa-
tion by 1990. 25X1
Based on recent discoveries of abundant reserves, the
UAE and Qatar have the potential to export substan-
tial amounts of gas to Japan, and possibly Western
Europe:
? The UAE is currently considering expanding the
Das Island LNG plant from 57,000 b/doe to 85,000
b/doe in the mid-1980s, if additional offshore gas
becomes available. Consideration is also being given
to building a 150,000-b/doe LNG plant to use
substantial quantities of gas recently discovered in
the Khuff onshore gas zones.
? Qatar, on the other hand, has again shelved plans
indefinitely to export gas from the North Dome
gasfields following a recent failure to reach agree-
ment with Japanese firms on gas volumes and
prices, according to recent press reporting. West 25X1
European firms involved in a proposed 150,000-
b/doe project have not yet expressed an interest in
assuming a larger share of the output. Although
Doha will probably proceed with plans to develop
the field to meet domestic requirements, exports will
again have to be considered as oil production de-
clines in the early 1990s
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Although the Italians are interested in a trans-
Mediterranean pipeline from recently discovered
offshore gasfields, development of offshore oil will
have first priority for the next several years.
? Egyptian reserves are so far insufficient to support a
gas project.I
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Other Potential Suppliers
Libya, Egypt, the Ivory Coast, and Congo could have
the potential to export gas if recent discoveries or ? Recent associated and nonassociated gas finds in the
additional reserves are proved up: Ivory Coast and Congo have sparked interest in
possible small gas export projects from these coun-
Libya is considering expanding gas export sales and tries As
ca acit several other countries in the region undertake oil
and gas exploration, other possible projects are
likely to be mentioned. We believe most of these
Libya may projects will not be undertaken unless substantial
also discuss expanding sales to Italy and Spain from reserves are proved up and financial commitments
its existing 160,000-b/doe capacity LNG plant.
However, the poor condition of the plant and low oil
production levels may prevent increased production.
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made. It is also probable that much of the gas found
will be used to meet domestic energy consumption,
particularly as these countries attempt to slow the
rapid growth in oil demand.
Arabian Gulf Pipelines
Proposals for pipeline networks from the Arabian
Gulf to Western Europe face a number of political
and financial obstacles
For such a project to move forward, the West Europe-
ans probably would have to forego any large addition-
al purchases of gas from Norway, the USSR, or Iran.
We believe a number of factors indicate that a
Persian Gulf pipeline is unlikely in the next decade:
? Delivered gas prices are likely to be as high or
higher than alternatives from Norway, the USSR,
or even Iran unless producers are willing to accept
extremely low wellhead prices. Past history indi-
cates such pricing decisions are unlikely. 25X1
? Transit fees could be exorbitant in some of the
countries crossed by the pipeline.
Political instability in the Gulf region raises serious
questions about the security of supplies, and some
European purchasers may question the wisdom of
trading dependence on OPEC oil for dependence on
OPEC gas. 25X1
I
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