INSTITUTE OF ENERGY STRATEGY

Future prospects of Russian gas demand in Europe after

Fukushima

Is there a chance for Golden Age of Russian gas?

Alexey GROMOVPhD in Economic Geography

Deputy General DirectorInstitute of Energy Strategy, Moscow

The WEO forecast for Europe for 2011 was revised with an increase of 40 BCM by 2035

European expectations: gas demand grows

Source: International Energy AgencyFig. 1 – Comparison of WEO-2010 and WEO-2011 for European gas demand

Gazprom Outlook

Russian expectations: excessive optimism

Actual data

Gazprom expects the increase of the Russian gas supply in Europe by 1,5 times (+ 80 BCM) by 2030 in comparison with 2010

Source: GazpromFig. 2 – Russian gas supply to Europe (forecast)

Positive and negative trends for Russian gas in EU

Germany: gas instead of nuclear power?

Сompletely replacement of nuclear power in Germany EXCLUSIVELY by gas does not require more than 33-39 BCM of natural gas

Source: BP statistical review 2011

Fig. 3 – Primary energy consumption by fuel type (from 1965)

Source: BP statistical review 2011

Fig. 4 – Primary energy consumption by fuel type , %

Primary energy consumption has been reducing consistently for the last 20 years in Germany

The share of nuclear energy in the energy mix in Germany is only 10% or 30-33 Mtoe

From 1990 to 2010 share of renewable energy in total energy consumption increased from 0.1 to 5.8%, the major growth occured in the period of high energy prices in 2000-2010.

Nord Stream project: is it only increase in export?

Commissioning phase of “Nord stream” pipeline(+55 billion cubic meters per year)

Source: GazpromFig. 5 – Milestone of increasing the capacity of export pipelines to Europe

Nord Stream will increase the export capacity to Europe by 55 billion cubic meter by the end of 2012.

The refusal of Bulgaria and Croatia from Russian gas: is it the precedent?

The refusal of Bulgaria and Croatia from Russian gas would reduce Gazprom export to Europe by 3.5 BCM

Source: GazpromFig. 6 – Dynamics of Gazprom gas supplies to Bulgaria and Croatia, 2003-2010.

Share of Russian gas on the EU gas market continues to decline...

In spite of Russian gas export volume recovery in 2010, the share of Russian natural gas supplies in the EU has continued to decline

Source: BP statistical review 2011

Fig. 8 – Breakdown of EU27 Supplies

Source: BP statistical review 2011

Fig. 9 – Breakdown of EU27 Supplies by transportation type

What next?

Thank you for your attention

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Alexey GROMOVDeputy General Director

Institute of Energy Strategy, Moscow

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