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* Focus on oil, politics, subsidised gas slowed development
* Region holds 30 pct of world's gas reserves
* Gas shortage a problem for power generation
By Rania El Gamal and Sylvia Westall
DUBAI/KUWAIT, May 22 (Reuters) - In the space of just 72hours last week core OPEC oil producer Kuwait lined up $15billion worth of gas supply from BP and Royal Dutch Shell tohelp meet soaring demand.
So why is it that Kuwait - along with neighbouring OPECpowers Saudi Arabia and the United Arab Emirates - is leftwanting for gas when the region houses around 30 percent of theworld's resources?
For decades, gas was overlooked while these producers wentall out to exploit their vast oil reserves. Political feuds andlow local gas prices also slowed development of thisclean-burning fuel and held up purchases from nearby Qatar, theworld's top exporter of liquefied natural gas (LNG).
Galloping demand from a population and industrial boom isforcing gradual change, although many billions will be needed totap the region's gas. Much of that gas is low in quality andhigh in sulphur, making it expensive and difficult to extract.
"Most Middle East crude producers are now realizing theeconomic and environmental benefits of increasing gas production- and, in the near term, gas imports - for their rising powerdemand," said Kelli Maleckar of energy consultancy IHS.
Kuwait and the UAE have done just that - boosting theirreliance on imported gas to meet power demand, especially insummer when consumption to power air conditioning goes throughthe roof. Saudi Arabia does not import gas.
POLITICS
Domestic political infighting that has long delayed Kuwait'snegotiations with oil majors to help tap its gas reserves couldalso derail its purchases: it has signed a $3 billion five-yearLNG deal with BP and a $12 billion six-year LNG deal withShell.
After pressure from Kuwaiti lawmakers, an investigation waslaunched in 2011 into a gas service agreement with Shell.
"Even though Kuwait has signed these (Shell and BP) deals,there is always that risk that a parliamentarian is going tocome and say 'you know what, I would actually like to questionthis deal'," said Eman Ebed Alkadi of consultancy Eurasia Group.
Kuwait also signed a short-term gas deal with Qatar lastmonth, but it is unlikely to depend on Doha in the long term dueto a political rift over Doha's support for Islamists, analystssay.
A long-discussed regional pipeline network would meanwhilego a long way towards solving supply problems, but it has alsobeen hampered by political disputes.
Demand for gas in the Gulf Cooperation Council (GCC) statesis likely to rise more than 50 percent, from 256 billion cubicmetres (bcm) in 2011 to 400 bcm in 2030, according to IHS.
Objections by top oil exporter Saudi Arabia had halted aplan for Qatar to pipe gas to Kuwait in the past. Many GCCmembers have long-running border disputes with each other.
Riyadh also opposed Qatar's pumping gas to the UAE, but theDolphin Energy project went ahead regardless. It now carriesabout 2 billion cubic feet of gas per day to the UAE and Oman.
The UAE has exported LNG since the late 1970s, but soaringdomestic demand and sluggish progress with its own productionhave turned it into a net gas importer over the last five years.
In the longer term, Iraq, which invaded Kuwait in 1990,could also provide supply for the region. For now, however, itfaces its own acute power shortage.
And Iran, which holds the world's largest gas reserves, isunlikely to provide a quick supply fix even if it reaches a dealwith world powers over its nuclear programme and sanctions arelifted.
"(Iran) faces a number of obstacles, among which is acrowded market place of suppliers, neighbours unwilling to pay ahigher price for its gas, and its own national financial andoperational hurdles," said Valérie Marcel of Chatham House.
Qatar, which imposed a moratorium on new gas developments,has offered to help Iran get more from the world's biggest gasfield which both countries share. Doha is concerned that toomuch Iranian drilling might impair recovery rates for bothsides.
'GAME CHANGER'
In anticipation of rapidly rising consumption, Saudi Arabia,which holds the world's fifth largest gas reserves, is exploringunconventional gas - "a game changer in our upstream productionstrategy", according to state-run Saudi Aramco.
It expects natural gas demand to almost double by 2030 from2011 levels of 3.5 trillion cubic feet per year.
Saudi Arabia burns a significant amount of its crude togenerate electricity and analysts warn that rising consumptionwill erode the amount available for export.
Saudi Oil Minister Ali al-Naimi has estimated unconventionalgas reserves at over 600 trillion cubic feet - more than doubleits proven conventional reserves.
"This means that resources in the kingdom are not theproblem, but rather how to discover, develop and produce suchresources," said Sadad al-Husseini, a former top executive atAramco. (Additional reporting by Reem Shamseddine in Khobar and AhmedHagagy in Kuwait,; Writing by Rania El Gamal; editing by KeironHenderson)