8/3/2019 EU-Russia Gas Relations a View From Both Sides

1/18

uss a as re a ons:A view from both sides

Helsinki, November 13, 2009

Vitaly Protasov,

, ,

v_protasov@fief.ru

8/3/2019 EU-Russia Gas Relations a View From Both Sides

2/18

-

Shares of Russian gas

50

60

30

40

10

20

1990 1992 1994 1996 1998 2000 2002 2004 2006

Consumption Import

Source: Eurostat

8/3/2019 EU-Russia Gas Relations a View From Both Sides

3/18

-

Russia natural process

Gas import structure in EU-27

80

90

100

60

70

Others

30

40

orway

Algeria

Russia

0

10

20

1990 1992 1994 1996 1998 2000 2002 2004 2006

Source: Eurostat

8/3/2019 EU-Russia Gas Relations a View From Both Sides

4/18

-

Payments from other countries are often postponed aymen s rom as s or nves men program o azprom

Duties and taxes from gas export in EU provides significant

90%100%

Distribution of Russian gas

90%100%

Structure of Gazprom gas turnover

40%

50%60%70%80%

40%

50%60%70%80%

0%10%20%

2003 2004 2005 2006 2007 2008

0%10%20%

2003 2004 2005 2006 2007 2008

Internal market Export in EU-27 Export in other regions Internal market Export in EU-27 Export in other regions

Source: Gazprom

8/3/2019 EU-Russia Gas Relations a View From Both Sides

5/18

-

Take-or-pay contracts

160

180

200

:

100

120

140

20

40

60

80

0

2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035

Sources: Gazprom, IEF estimate

gas-chemistry industry but it needs a lot of time and investments

8/3/2019 EU-Russia Gas Relations a View From Both Sides

6/18

- ,

EU gas demand substantially lower than in WEO-2008

Primary gas demand, mtoe 2007 (2006) 2020 2030 2007-2030

- , ,

WEO-2009, 450 Scenario 432 429 418 -0,1%

Main reasons for as demand rowth slowdown:

WEO-2008, Reference scenario 438 517 559 1%

Source: WEO-2009, 2008

Economic crisis, economic growth slowdown

Increasing of energy efficiency, demand for renewable sources

8/3/2019 EU-Russia Gas Relations a View From Both Sides

7/18

-,

Reference scenario and 1,4% for 450 Scenario

Share of natural gas in EU balance in Reference scenario willincrease

CoalRenewabl Coal

Renewabl18.8%

Nuclear13.9%

es

8.2%

.

es17.0%

2007Oil

30.6%

uc ear10.8% 2030

Oil34.5%

as24.6%

Gas28.5%

Source: WEO-2009

8/3/2019 EU-Russia Gas Relations a View From Both Sides

8/18

Source: WEO-2009

8/3/2019 EU-Russia Gas Relations a View From Both Sides

9/18

Russian gas production will increase from 646 bcm

in 2007 to 655 bcm in 2015 and 760 bcm in 2030 Gas export in Europe will be 210 bcm in 2020

Source: WEO-2009

8/3/2019 EU-Russia Gas Relations a View From Both Sides

10/18

PRIMES model, basis of 20-20-20 program

Reducin role of natural as from scenario toscenario

-

Primary energy

consumption 1811 1958 1967 1711 1672

Oil 666 699 702 608 567

Gas 445 620 505 399 345

Renewables 123 157 197 270 274

Nuclear 257 220 221 218 233

Source: Capros P., Overview of Energy Economic Analysis for the EC, 2009

8/3/2019 EU-Russia Gas Relations a View From Both Sides

11/18

,

European gas import will decrease significantly

Source: Capros P., Overview of Energy Economic Analysis for the EC, 2009

8/3/2019 EU-Russia Gas Relations a View From Both Sides

12/18

Overcoming of crisis effects

1 stage (before-

ncreas ng o energy e c ency

Implementation of projects in East Siberia,Yamal, arctic shelf

2 stage (before2020-2022

Innovative development of energy system

Effective use of traditional sources ofenergy

3 stage (before2030

8/3/2019 EU-Russia Gas Relations a View From Both Sides

13/18

Diversification of export routes

Partici ation of Russian com anies in as fieldsdevelopment in Algeria, Iran, Central Asia

400

LNG industry

300350

uss an gas expor , cm uss an s an ar

mport o gas

from Central Asia 150200

East

West

CIS

0

50

2005 1 stage 2 stage 3 stage

Source: Russian Energy Strategy till 2030

8/3/2019 EU-Russia Gas Relations a View From Both Sides

14/18

vers ca on o ranspor rou es: or ream,

South Stream, Blue Stream-2, Altay Movement to end consumer market

Develo ment of LNG: Sakhalin Shtokman Yamal

Development of new huge gas fields

xpor par y or n erna mar e

Long-term contracts, stabilizing position in Europeanmarket

8/3/2019 EU-Russia Gas Relations a View From Both Sides

15/18

8/3/2019 EU-Russia Gas Relations a View From Both Sides

16/18

Huge differences between different scenarios

Hi h de ree of uncertaint

, ,

mtoe

BL-2007

Reference ES-2030

Gas import 390 349

Import from Russia 105 172 150154

Sources: Capros P., Overview of Energy Economic Analysis for the EC, 2009; IEA, World Energy

Outlook 2009; Russian Energy Strategy till 2030

8/3/2019 EU-Russia Gas Relations a View From Both Sides

17/18

substantially. This interdependence will remain in mid-term

period In terms of economy and ecology natural gas can be a future

of European energy system. But it probably means increasing

There is too much politics in gas relations

between scenarios

We need more EU-Russia Energy Dialog at regular basisincluding meetings about energy strategies, scenarios andforecasts

8/3/2019 EU-Russia Gas Relations a View From Both Sides

18/18

Thank you for your attention!