Wintershall Chairman Reinier Zwitserloot, speaking Feb. 10 in Houston during a Q&A session following a Eurasia Transportation session at Cambridge Energy Research Associates’ annual executive conference, placed the likelihood of completing the trans-Baltic Nord Stream natural gas pipeline at “100.00%.” The 762-mile, 48-in. Nord Stream would connect Russia directly to Germany. His remarks were made in reaction to earlier descriptions of Nord Stream as an alternative path for gas deliveries to Europe.
Zwitserloot explained that by 2020 Europe will produce 100 billion cu m/year less gas than it currently does. At the same time, regardless of which studies one looks at and no matter how much alternative energy comes on line, demand for gas in Europe will continue to grow, Zwitserloot said. “In all the studies—green, greener, not so green—European demand for gas is going up.” Combining these factors, a gap of 150-200 billion cu/m year emerges between European supply and demand by 2020 according to Zwitserloot.
Europe has a major natural gas advantage over the Far East and the US, Zwitserloot said: It is within pipeline distance of most of the world’s gas reserves. LNG “is not the silver bullet” for Europe, said Zwitserloot, it being more likely to go to the US long term and the Far East short term, with availability to Europe limited. Similarly, plentiful North African gas exists “only in [our] dreams,” according to Zwitserloot, with real development in places like Libya still practically nonexistent.
Two alternative supply sources remain, he explained: the Caspian and more gas from Russia. The Nabucco pipeline could be built, Zwitserloot allowed, but the only realistic supply source is Iran. Gas from Turkmenistan is not crossing the Caspian, he said. It will go instead either to Russia or Iran. Azerbaijani supplies could reach Europe, but that is by no means certain; “so, your choices for gas from the region are either Iraq or Iran,” Zwitserloot said.
Additional gas from Russia will have to be part of the path forward and will require additional infrastructure. “The Yamal system is full, full, full,” said Zwitserloot. “The system through the Ukraine is in very bad condition even without the political problems and will require large investments just to keep capacity from shrinking year by year.” Nord Stream should therefore be seen not as an alternative or bypass route but as a needed additional path for energy supplies to reach Europe, he said.
BASF oil and gas division Wintershall holds a 20% stake in Nord Stream, with partners Gazprom holding 51%, E.On Ruhrgas 20%, and NV Nederlandse Gasunie 9%. The twin pipeline system between Vyborg, Russia, and Greifswald, Germany, is scheduled to come online in two steps: the first line is to enter service in 2011 and the second in 2012. Total capacity will be 55 billion cu m/year (OGJ, Feb. 9, 2008, p. 60).