RSS| Gazprom Expects Bigger Europe Share Amid Supply |
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Gazprom expects its share of the European gas market to reach 32 percent by 2020 as the Russian gas-export monopoly rejects concerns over a looming supply glut. Gazprom is “moderately optimistic” on the outlook for European gas demand, Sergei Komlev, head of contract structuring and price formation at the company’s export unit, said at the Russia Forum in Moscow. Gazprom, the world’s biggest natural-gas producer, now supplies about 25 percent of Europe’s gas. It plans new supply routes such as the Nord Stream and South Stream pipelines to supply its biggest export market.Global gas demand has been hit by the economic crisis, while European supply increased with liquefied natural gas imports at a time when the U.S. pursued its own production from unconventional sources. In the U.S., shale gas may account for 60 percent of U.S. output by 2020, Fatih Birol, the chief economist at the International Energy Agency, said at the forum. U.S. producers will continue investing in shale gas developments at prices of $5 per million British thermal units, he said in an interview at the conference. Producers earn a 10 percent return at that price, Birol said. “I don’t have very good news for Russia,” Birol said at the conference. The supply glut will stay until 2015 and may reach as much as 200 billion cubic meters by that year, he said, according to a Troika Dialog note today. After 2015 After 2015, the picture will change in Europe and gas may play a role in new thermal power generation, depending on climate change policies and competition with nuclear power. In China and the U.S., gas will face competition with coal, Birol said. Komlev said he doesn’t agree with IEA estimates that European gas demand fell 8 percent last year and said there was a 6.8 percent contraction. The long-term demand outlook is not as “dramatic” and there will be a shortage of 250 billion cubic meters of gas by 2030, he added.Europe’s own gas production may fall by 60 billion cubic meters over the next decade, while demand will rise by 70 billion cubic meters, Komlev said. By 2030, aging fields in Europe will reduce output by 80 billion cubic meters, and demand will grow by 40 billion cubic meters, he said. |
| Last Updated ( Friday, 05 February 2010 19:10 ) |
