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1st East Med Energy Leadership Summit - Nikolaos Farantouris

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Prof. Nikolaos Farantouris, Jean Monnet Professor of EU Law, International & European Studies Dept., University of Piraeus & Chair, Legal Affairs, EUROGAS, Brussels

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1st East Med Energy Leadership Summit - Nikolaos Farantouris

  1. 1. Natural Gas Projects in East Med Nikolaos Farantouris 2019
  2. 2. How will the EU energy markets evolve to 2040? ◦ Fuels remain the dominant energy sources ◦ Oil & Gas: Demand in the EU grows in absolute terms through 2040. Some 60% of natural gas is imported from third countries Some 80% of oil is imported from third countries. Excessive need for energy consumption in the coming years ◦ Nuclear power: downward revision from previous projections ◦ Renewables: their share of electricity generation grows. However, the increase sometimes reflects subsidies and higher energy prices
  3. 3. Source: PFC Energy EU Growing Supply - Demand Imbalance in Gas Europe needs to replace ~100 bcma from declining production by 2025. Europe faces a supply-demand gap by 2020 and it grows larger by 2025. Most of its existing suppliers will not increase exports. Increasing demand despite the crisis Around 20 bcma of the supply gap comes from the East
  4. 4. Energy supply sources to Europe North Africa Russia Egypt Caspian Region Middle East Source: BP Statistical Review of World Energy 2011 The Southern Corridor would permit the EU to tap into vast proven reserves of 46.2 Tcm. Additional export capacities to EU limited by lack of investments. Nord Stream Pipeline Limited upside production potential and partially exported via LNG. Traditional external supply sources Potential new supply sources East Med East Med may provide another diversified source of natural gas to the EU
  5. 5. Proposed Pipelines & Infrastructure
  6. 6. East Med & SE Europe Energy Projects 1. The Southern Corridor remains the most advanced project connecting South East Europe and Italy. Environmental and regulatory framework in place. 3. Interconnector Greece - Bulgaria (IGB): it will supply up 3-5bcma 4. A planned Floating Storage and Regasification Unit (FSRU) in Northern Greece will allow LNG to flow to Europe. Italy Croatia Romania Bulgaria Russia Turkey Greece Montenegro B&H Slovenia Serbia FYROMAlbania Hungary LNG LNG TAP South Stream Nabucco West East Med IGI Poseidon IGI Onshore IGB Other Interconnectors LNG Terminal IGI 2. The East Med Pipeline connecting Cyprus, Israel and possibly Egypt to the EU. An offshore pipeline from the fields of Eastern Mediterranean may connect these newly found sources to Europe opening a New Energy Corridor.
  7. 7. Increasing role of LNG: 0 5 10 15 20 25 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 Oil Europe Contract Europe Market Henry Hub Asian Market Asian Contract LNG globally commoditized
  8. 8. Increasing role of LNG: 0 100 200 300 400 500 600 700 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 Africa OECD Asia Non-OECD Asia CIS Europe Latin America Middle East North America LNG Demand (includes boil-off gas) (Mmtpa)
  9. 9. The EU energy system is undergoing a far reaching transition in which three agendas collide: ◦ An economic agenda of supply and demand and of competitiveness ◦ A security agenda reflecting dependence on trade in oil & gas and need for diversification ◦ A sustainability agenda focused on the search for a low-carbon energy mix
  10. 10. Some legal developments: Brussels takes charge ◦ For the first time, Brussels is taking concrete steps to wrest control of energy deals and agreements from the EU Member States ◦ New regulation establishing an information exchange mechanism with regard to intergovernmental agreements between Member States and third countries in the field of energy ◦ The EU Commission wants to monitor all intergovernmental energy deals between EU member states and third countries ◦ In the longer term, it seems it wants to be allowed to negotiate commercial energy deals on behalf of the EU ◦ EU Commission: "The success of any energy policy is dependent upon a successful common external policy on the part of the EU“, "If we speak with one voice, we 've got a completely different weight in negotiations"
  11. 11. 4 Key objectives of EU energy policy EU energy policy shall aim to (Article 194 TFEU): 1. ensure the functioning of the common energy market with competition 2. ensure security of energy supply in the EU 3. promote interconnection of energy networks 4. promote energy efficiency and energy saving and the development of new and renewable forms of energy
  12. 12. The new findings and proposed energy infrastructure projects can accelerate movement towards more diversified trade flows, more intense competition and lower prices

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