Arthur D. Little introduces model for optimizing natural gas allocation in GCC
To enable a more structured approach to natural gas allocation in the GCC, Arthur D. Little has introduced the Resource Utilization Index – a new framework designed to help policymakers evaluate allocation decisions across five strategic dimensions.
The need for such a framework arises from the region’s continued reliance on traditional – and sometimes suboptimal – methods of allocating gas. For decades, decisions have been guided by a straightforward logic focused on three primary objectives: meeting domestic power needs, supporting key industries, and fulfilling export commitments.
Arthur D. Little, a global management consultancy, argues that adopting a more systematic and data-driven approach could unlock substantial value for both governments and the industries that rely on natural gas, such as petrochemicals, metals, fertilizers, and energy.
The stakes are undeniably high: the GCC collectively holds around 20% of the world’s discovered natural gas reserves.
“By using the Resource Utilization Index, countries make more informed decisions on how to allocate their natural gas resources across competing sectors. The framework enables policymakers and corporate planners to evaluate the economic, industrial, and social value generated by gas in a structured, comparable way,” said Peter Kaznacheev, Principal at Arthur D. Little.
Enter: The Resource Utilization Index
The five dimensions of the Resource Utilization Index are:
EBITDA margin impact
This dimension measures the operating profitability generated per unit of gas across various industries. Crucially, it adjusts for opportunity costs, especially in sectors where subsidized gas input may distort actual returns. Adjusted EBITDA generates a more accurate picture of the financial value gas creates, accounting for its real economic cost.
GDP contribution
GDP contribution captures the direct, indirect, and induced impact of gas use on national output. For example, gas-to-aluminum pathways support local supply chains in mining, smelting, and transport, generating economic value beyond the immediate product. This dimension uses input-output models to calculate multipliers, helping policymakers understand how each allocation choice affects total value creation across the economy.
Employment generation
This dimension assesses the number and quality of jobs created per unit of gas consumed. It includes direct employment and jobs in supply chains and services. Factors such as skill levels, workforce localization, and gender participation are considered to reflect social value and alignment with national workforce strategies.
Economic complexity
Economic complexity looks at how gas allocation contributes to diversification and industrial upgrading. Industries that enable production of more sophisticated, high-value exports score higher, helping reduce overreliance on raw commodity exports.
Global market & strategic synergies
This dimension captures the market potential of gas-powered sectors. It considers factors such as export readiness, trade partner alignment, and infrastructure leverage. For example, using existing bilateral partnership agreements in gas and/or oil trade to promote metals exports could generate opportunities with existing LNG or crude oil buyers, creating synergies that extend beyond a single product line.
Ilya Epikhin, Principal at Arthur D. Little, said that by taking a more structured approach to quantifying the economic, social, and strategic value of each cubic meter of natural gas, GCC leaders can make allocation decisions that reinforce competitiveness and resilience, but also diversification of national economies. “Our framework empowers nations to view gas not just as an energy source, but as a strategic lever for sustainable growth.”
An example
Kaznacheev and Epikhin provide an example of how this could work in practice. In aluminum smelting, energy can account for up to 40% of production costs, and overall energy usage can represent around 50% of total aluminum production costs.
But while access to affordable gas strengthens cost competitiveness of aluminum manufacturing, the Resource Utilization Index could guide decision-makers towards redirecting the gas allocated to aluminum to higher-return uses such as LNG exports or advanced petrochemicals.
A holistic and optimized process
“The Resource Utilization Index is not about prescribing a single path for gas allocation. It’s about equipping decision-makers with the tools to make choices that align with national goals, economic diversification, and long-term resilience,” said Kaznacheev. “By measuring profitability, economic impact, and strategic alignment in a single framework, we offer a holistic view of where gas delivers the greatest value.”
That value, as well as the trade-offs, will differ per country. Arthur D. Little’s accommodates for such differences, by allowing policy makers to tailor the weights to each of the five dimensions to reflect national priorities. Similarly, as market conditions change or new industries emerge, the index can be recalibrated.
