What connects the watermelon to natural gas?

Fatema Al Nuaimi, the chief executive of Adnoc Gas, recalled in an interview with me last week that when she tries to explain the interconnectedness of gas in our daily life, she often uses this example.

“Even the watermelon that we plant has traces of Adnoc Gas.” She is not wrong. For a watermelon to grow in the UAE, it requires irrigation water, pumped using electricity - which in the Emirates is largely sourced from gas. It is then picked and kept in cold storage, which is again gas-powered. For the watermelon - a necessity in UAE summers - to arrive at our tables without needing hydrocarbons, is an impossibility.

The gas that makes watermelons grow also keeps lights on, cars running, when used in the compressed natural gas form, and also finds its way into plastics that are indispensable to modern life.

However, much like its cousin oil, gas is also incredibly politicised. We saw that after Russia’s invasion of Ukraine, when Europe’s dependence on the former’s gas made it easy for Moscow to wield its supply of the fuel to its political advantage.

We also see it in the region. In today’s newsletter, we take a look at Adnoc’s plans for gas, Iraqi Kurdistan’s safety issues surrounding gas production and what Opec plans to do next year.

To watch this week

Is there a global gas glut?

Adnoc Gas’s chief executive doesn’t think so. In a wide-ranging interview, Ms Al Nuaimi, who previously headed Adnoc LNG, countered industry opinion of an impending glut in the LNG markets. Adnoc is building a 9.6 million tonne per annum capacity liquefied natural gas plant at Ruwais. Over 80 per cent of planned output has already been allocated via long-term deals including with Shell and Indian Oil. The remainder, she said, would be set aside to meet spot demand, coming mostly from Asia.

Industry projections: The International Energy Agency says 300 billion cubic metres of new LNG export capacity will be added annually by 2030 as projects in the US and Qatar start up. In 2026, LNG supplies are set to rise by 7 per cent to 40bcm, which is the largest increase since 2019. Demand is also keeping up with supply and is forecast to rise 2 per cent in 2026.

Adnoc Gas’s take: Ms Al Nuaimi differentiates between project announcements and implementation. “Supply usually comes in a step change," she said. She expects prices to go into a “reasonable lower range” in 2026, prompting more people in Asia to switch from polluting coal to gas.

Troubles in Khor Mor

Abu Dhabi may have gas so plentiful it can grow watermelons in the desert. However, in Iraqi Kurdistan, which has 3 per cent of the world's gas reserves, power shortages are a daily reality.

The government in the Kurdistan Region of Iraq has struggled to keep the lights on for its 6.5 million people. The KRG even launched a project called Runaki last year to upgrade the region’s electric grid and provide uninterrupted power by the end of 2026.

In parts of the region, power had grown reliable enough that households began cancelling their private generator contracts. However, a drone strike on the Khor Mor gas field operated by Dana Gas halted supplies to power stations and caused blackouts. By Sunday, production had restarted and power had been restored.

The strikes on Khor Mor come a year after the last deadly attack on the site, which left four people dead. The attacks happened just as the KRG was helping connect its people to an uninterrupted grid. As Amena Bakr writes for us, politicising the power sector helps no one.

Bottom line: Iraq’s Kurdistan region had been on a mission to provide 24/7 electricity for its people. Despite having abundant gas, its fractious relations with the Iraqi federal government have been a detriment to enabling energy access for all.

Opec's endgame

What does Opec+ hope to accomplish? The group of 22 countries, led by Saudi Arabia and Russia, has paused production increases for the first quarter of 2026.

Since October, the group has been unwinding 1.65 million bpd of voluntary cuts first implemented in April 2023. Opec+ approved adding about 137,000 bpd for each of October, November and December.

Fearing a possible glut should Russia/Ukraine peace talks materialise, Opec+ has instead chosen to hold fire over bringing more supply into the markets. The group also approved a mechanism to assess production capacities, which will then enable them to determine output quotas in the new year.

Producers such as the UAE, which is very close to its targeted 5 million bpd of capacity, want to produce more, while many African producers have struggled to bring on more output.

What to expect: Opec's pause comes as market analysts worry about a staggering glut. Rystad Energy forecasts an oversupply of 3.75 million bpd of liquids in 2026 - one of the largest projected gluts in recent years.

Jargon buster

Spot demand: I talk about spot demand in my interview with the Adnoc Gas chief executive. Simply put, it means the immediate demand for a commodity. Spot demand results in spot delivery prices, which determine immediate sale of a commodity, such as oil or LNG. This is in contrast to long-term contracts, which are pre-agreed and enforced despite changes in current market price for a commodity.

Happening this week

• Syria's International Expo for Oil, Gas & Energy in Damascus (December 3-6)
• Libya International Gas Forum in Tripoli (December 6-7)
• Middle East Gas Conference in Dubai (December 10)

Our top energy reads

Taqa and Dubal Holding to buy EGA’s power and water plant in $1.9bn deal

Iraq invites US companies to bid on West Qurna 2 oilfield

UAE to provide $1 billion to support Yemen's energy sector

The National produces a variety of newsletters across an array of subjects. You can sign up here.