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The role of natural gas in eu energy security
 

The role of natural gas in eu energy security

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By Hans van der Loo

By Hans van der Loo
Head European Union Liaison, Royal Dutch Shell

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    The role of natural gas in eu energy security The role of natural gas in eu energy security Presentation Transcript

    • Disclaimer statement This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentations, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Group’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from recategorisation of reserves; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2008 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 3 March 2010. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. 1
    • 4 Factors determine CO2 Emissions CO2 emissions = Xx Xx people GDP person energy unit GDP x unit energy CO2 Only four factors govern the outcome, being: •  Population Number of people •  Standard of Living GDP per person •  Energy Intensity Energy per unit of GDP (efficiency of the economy) •  Carbon Intensity CO2 per unit of energy (reflects the energy source)
    • Decarbonisation Pathways, incl Gas Emission reduction (CO2 / unit energy) Further shift to Nuclear Renewables Bio-products Carbon capture natural gas power and storage Energy conservation and efficiency (energy / unit GDP) Mass Road Buildings Low energy Doing things transportation transport appliances differently
    • Bright Future for Gas Supply The Guardian: UK’s carbon emission dropped by 2% in 2008 2 Feb 2010 “According to the Department of Energy and Climate Change, the decrease is the result of continuing to switch CERA: Storage levels higher than the from coal to natural gas for making electricity, combined with lower consumption of fossil fuels in industry and previous year transport.” CERA reported recently that “the European Gas Coordination Group met in January 2010, noting that storage levels were higher than in the previous year and praising the industry for ensuring supply.” 5
    • A/S Gas : Abundant & Secure gas resource in Europe NO: 109 TCF UK: 49 TCF DK 2.1 TCF DE NL: 9 TCF 53 TCF South Stream 6 Source: CERA
    • Europe is surrounded by large gas reserves accessible to its market ? Russia: 45 TCM Indigenous: 6 TCM Trinidad &Tobag South o Stream 1 TCM Nigeria Caspian & 4 TCM Middle East: 86 TCM North Africa 7 TCM 7 Source: CERA
    • Unconventional Gas Global Distribution of GIIP - US National Petroleum Council 5,485 TCF 1200 TCF 8,228 TCF 5,094 TCF 3,370 TCF 3,448 TCF 1,097 TCF 3,487 TCF 8
    • “Natural gas will play a key role whatever the policy landscape…” 2009 World Energy Outlook, IEA All three of CERA’s scenarios show natural gas growing or maintaining its share of Europe’s total primary energy demand 9 Source: CERA
    • Gas is Core to the Clean Energy Solution 10 Source: Eurostat data, Shell analysis
    • Shell is a major contributor to gas supply into Europe START-UP DATE FIRST LNG MARCH 09, TRAIN 2 ONSTREAM MAY 09 2008 2009 GJOA 2010+ CORRIB HALFDAN PHASE IV KASHAGAN SAKHALIN II QATARGAS 4 PEARL GTL GUMUSUT-KAKAP AFAM Nigeria LNG T6 GORGON NWS T5 / ANGEL PLUTO (WOODSIDE) Start up 2007 Qatargas 4: 2010+ •  MID YEAR RESULTS 2009 START UPS ADD 140 KBOE/D PEAK PRODUCTION •  ~1 MLN BOE/D UNDER CONSTRUCTION KEY POST-FID PROJECTS •  PRE-FID OPTIONS FOR UPSTREAM GROWTH TO ~2020 11
    • Towards more power generation from Gas •  Current UK power generation is 40% gas driven and 80% of UK homes utilise gas for heating •  World Gas supply equivalent to 150+ years of current consumption •  Gas fired power, when compared to Coal : -  50-70% less CO2 output -  60% less capital intensive per MW installed -  Lower power generation costs compared to other sources -  More flexible to deliver peak outputs -  Can be retrofitted to include CCS 12
    • GAS a prominent part of EU Energy Mix deserves EU Policy support •  The Reality is - We need ALL fuels for some decades to come •  Natural gas merits a prominent place in the EU energy mix •  Gas is abundant, safe, less polluting, reliable •  Shell is committed to work with you to realise the full potential for gas in Europe 13
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