DUBAI, Dec 21 (Reuters) - Overall debt issuance from the Gulf is expected to decline next year, as sovereigns issue less bonds due to improved government finances, but a rise in corporate debt sales will cap the downside, bankers said. The trend will continue from this year, when corporate bond sales outpaced supply from Gulf sovereigns, whose finances have been buoyed by lofty oil prices. Sovereign issues dropped by 13.6% year-over-year in 2021 while corporate debt sales climbed 8.1%, according to Kuwait-based asset manager Kamco Invest. "If we remain at these somewhat elevated oil price levels, then the sovereign funding requirements should go down," one of the bankers said. Global crude oil futures have risen nearly 40% so far this year and are currently around $72 a barrel as the global economic recovery fuelled oil demand. The Saudi government, for years a major issuer of multi-billion dollar bonds, has said it will likely limit its fundraising activities to refinance maturing debt. read more But companies could accelerate their issuance plans in the first quarter of 2022 to make the most of ample global liquidity before major central banks move ahead with their monetary tightening plans. Investors in Saudi Aramco (2222.SE) are likely to issue bonds in the first quarter to begin refinancing a $10.5 billion loan that backed the lease and leaseback agreement for the company"s oil pipelines, two bankers said. Abu Dhabi wealth fund Mubadala is expected to tap the market in the first quarter, they said. The governments of Bahrain and Oman are also likely to issue bonds next year, the bankers said, one of them adding Bahrain could issue as early as the first quarter. Bahrain and Oman"s finance ministries did not respond to emailed requests for comment. The Aramco investors are a consortium led by EIG Partners, and the latter declined to comment. When contacted by Reuters for a comment, Mubadala said in a statement it "will continue to evaluate the optimal time to access the debt capital market in 2022." "RACE TO GREEN" Issuance of green bonds is expected to pick up in the Gulf in 2022 as governments move forward with plans to meet ballooning demand from investors focused on environmental, social and governance (ESG) considerations, the bankers said. This year, Saudi Arabia pledged to become carbon neutral by 2060 and the UAE set its net-zero target as 2050. "It"s a race to green. Everybody is trying to do green this, that or the other," one of the bankers said. The bankers asked not to be identified as the information is private. Utico, a private utility company in the UAE, is set to issue sustainability sukuk, which are Islamic bonds, next year, possibly in the first quarter, a third banking source said. Sustainability bonds are linked to sustainable projects or deliverables. Utico did not respond to an emailed request for comment. Elsewhere in the region, Qatar has $2 billion in bonds maturing on Jan. 20, so it may decide to tap the market to refinance them, the bankers said. Qatar"s finance ministry did not respond to an emailed request for comment. As of mid-December, total issuance from the region this year had fallen to $145.5 billion from a record $150.4 billion in 2020, asset manager Kamco said. Reporting by Yousef Saba and Davide Barbuscia; Editing by Ana Nicolaci da Costa