EAGC 2012: Gas sources abound but regulated marketplace discourages

European gas industry leaders gathering in Vienna for the second day of the 27th annual European Autumn Gas Conference finally heard some encouraging views about natural gas in Europe. That theme, however, seemed discordant against yet another dose of discouraging prospects articulated by some speakers.

Representatives of projects for importing more gas into Europe generally sounded optimistic in contrast to speakers on the previous day (OGJ Online, Nov. 13, 2012).

Henning Kothe, project director for Nord Stream AG, which operates the nearly complete twinned 760-mile pipeline from Vyborg, Russia, to Lubmin, Germany (OGJ Online, Aug. 30, 2012), not surprisingly said he sees a “place and a need” for natural gas in Europe, in particular, and in the wider world.

As his project is progressing to build additional capacity, he expressed a need for further gas infrastructure capacity in Europe.

John Baldwin, BP PLC vice-president for the Southern Corridor, likewise expressed optimism for gas in Europe, focusing especially on demand in Turkey.

Indeed, throughout the conference, several speakers have excepted Turkey in particular and southeast Europe in general from the gloomy views of near-term gas prospects in Europe. Baldwin touted the growth of gas supplies from the South Caspian basin via pipeline into Europe.

Matthias Keucheel, E.On Ruhrgas senior vice-president for gas supply in the South Caspian region, said demand for natural gas in Turkey in the medium and long term will increase. He noted the lack of a unified market in Europe and the highly liquid market in the UK.

He presented the prospects for and advantages of the proposed Trans-Adriatic Pipeline (OGJ Newsletter, Aug. 20, 2012).

Negativity intrudes

Hanging over and qualifying these outlooks, however, were the views of other industry speakers.

Stefan Judisch, chief executive officer of RWE Supply & Trading GMBH, told the gathering that Europe needs no more natural gas infrastructure. He illustrated the current decline of demand for natural gas by citing the 15% price drop on Nov. 13 in the shares of E.On Ruhrgas—the largest ever such drop, he said.

Germany in particular, Judisch believes, reflects the future, with its deep subsidies for solar photovoltaic panels. The country is home to “40% of the world’s photovoltaic panels,” he said, and there is no reason the technology will not spread to global regions with far more days of sunshine, such as Saharan Africa.

From the viewpoint of Chris Finlayson, executive director and managing director of BG Advance, European subsidies for renewables have undermined what was once a healthy trend toward European natural gas market liberalization.

As have others at the conference, Finlayson noted the irony of carbon emissions falling in the US while increasing in Europe—almost entirely from the burning of coal imported from the US. In the last year, he said, coal imports from the US have increased by 24%.

He sees virtually no chance for shale development on any but the smallest scale in Europe and believes LNG will come to Europe as a market of last resort.

Finally, Erwin Van Bruysel, executive vice-president for long-term gas supply for Eni SPA, Gas & Power Division, sees the only revival in Europe being the renewal of price regulations. As for security of natural gas supply, it sits “under a cloud of coal dust.”

Contact Warren R. True at warrent@ogjonline.com.

Related Articles

DOE approves LNG exports to non-FTA countries from Oregon project

03/24/2014 The US Department of Energy conditionally approved Jordan Cove Energy Project LP’s application to export LNG through its proposed terminal on Orego...

MARKET WATCH: Front-month crude oil contract closes up, gas down on week

03/24/2014

The front-month crude oil contract ended the week higher Mar. 21 while natural gas futures prices edged slightly lower.

HSC remains closed, fuel cleanup continues after barge collision

03/24/2014 The Houston Ship Channel (HSC) remained closed to unauthorized vessels Mar. 24 as the result of a temporary emergency safety zone being established...

Judge bars Anadarko e-mails as evidence in Macondo blowout hearing

03/21/2014 A federal district judge in New Orleans refused to accept e-mails between Anadarko Petroleum Corp. and BP PLC as evidence in a hearing to determine...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected