Global Gas Markets Over the Coming 10-20 Years

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Anne-Sophie Corbeau
Senior Gas Expert, IEA
2011

Published in: Business, Technology
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Global Gas Markets Over the Coming 10-20 Years

  1. 1. Global gas markets over the coming 10-20 years Anne-Sophie Corbeau Senior gas expert© OECD/IEA 2012
  2. 2. Gas has a bright future  World gas demand is expected to increase in all scenarios  Most of the growth takes place in non-OECD countries  But there are many disparities between the scenarios  Difference of 1.2 tcm by 2035 = US + EU demand together  4 times the world’s LNG export capacity as of 2011©© OECD/IEA 2010 OECD/IEA - 2012
  3. 3. WEO 2011 New Policies Scenario Gas and REN meet two thirds of incremental demand World primary energy demand 5 000 Mtoe Additional to 2035 4 000 2010 3 000 2 000 1 000 0 Oil Coal Gas Renewables Nuclear  Gas is the fastest growing fossil fuel (1.7%/y)  Gas still ranks third, but the gap with coal goes down©© OECD/IEA 2010 OECD/IEA - 2012
  4. 4. But the EU story is not always one of growth… Source: IEA, WEO 2011  In the NPS scenario, EU gas demand is expected to grow from 508 bcm in 2009 to 593 bcm in 2020 and 629 bcm by 2035  The power generation sector remains the main driver for growth  But it would actually go down by 12% in the 450 scenario©© OECD/IEA 2010 OECD/IEA - 2012  Why? Less energy used, more renewables and more nuclear
  5. 5. Europe: cyclical and structural limits to gas demand  The Eurozone crisis  Decreased competitiveness of gas versus coal due to oil indexation  Continuous push on renewables  Along with mild weather in 2011 Led to a major (-8%) demand decline over the first 10 months of 2011 Is a reversal in sight?©© OECD/IEA 2010 OECD/IEA - 2012
  6. 6. German moratorium: Even with policy success, gas will be needed to deliver CO2 reductions German electricity mix with 10% demand reduction, no nuclear, 35% renewables and CO2 at the target level©© OECD/IEA 2010 OECD/IEA - 2012
  7. 7. Why China is interested in natural gas Environmental impact  China’s gas demand will increase to 500 bcm by 2035 compard to 130 bcm in 2011  Plans to reach 260 bcm by 2015…©© OECD/IEA 2010 OECD/IEA - 2012  They will need new sources of supply
  8. 8. Japan: future of nuclear might have large impact on gas demand 600 TWh/y Nuclear in Pre-Fukushima energy strategy 500 10 bcm LNG burned in CCGTs: 60 TWh 400 Power demand growth halved by efficiency: 85 TWh 300 Building the current EU PV 2010 nuclear production capacity in Japan: 25 TWh 200 100 Current nuclear production on an annualized basis 27 Jan 2012: 0 3.1 GW currently operating (out of 49 GW) 2011 2015 2020 2025 2030 2035©© OECD/IEA 2010 OECD/IEA - 2012
  9. 9. US power sector The taste of things to come? Shares of coal and gas in the power generation©© OECD/IEA 2010 OECD/IEA - 2012
  10. 10. Russia remains the largest gas producer Changes in annual production©© OECD/IEA 2010 OECD/IEA - 2012
  11. 11. International trade is bound to increase  China, Europe and OECD Asia are by far the largest importers  Additional exports will come from FSU, Africa and the Middle East©© OECD/IEA 2010 OECD/IEA - 2012
  12. 12. Shale gas in Europe: slower ramp up than in the United States  Geology less favorable than in the US  Higher population density  Lack of an onshore industry tradition – skilled labor, service companies etc.  But: shale gas competes with oil indexed import gas at 3 times the Henry Hub price©© OECD/IEA 2010 OECD/IEA - 2012
  13. 13. Russia set for greater diversity of gas export markets  Net gas exports rise substantially from 190 bcm in 2010 to close to 330 bcm in 2035, bolstered by an expansion of gas trade©© OECD/IEA 2010 OECD/IEA - 2012 links with China
  14. 14. China becomes the main market for Turkmenistan gas  The Turkmenistan-China pipeline has shifted the centre of gravity of Central Asia’s gas sector eastwards, but uncertainty remains©© OECD/IEA 2010 OECD/IEA - 2012 over markets for offshore Turkmenistan gas
  15. 15. Expanding supply along a southern corridor to European markets©© OECD/IEA 2010 OECD/IEA - 2012
  16. 16. The next wave of LNG supply is almost entirely dominated by Australia  Over the next 6 years, most of the new LNG is expected to come from Australia  If it arrives on time  This LNG is not going to be cheap  Only the US seems to be in a position to challenge this if©© OECD/IEA 2010 OECD/IEA - 2012 Cheniere’s project (15 mtpa) moves forward
  17. 17. The Arab Spring and Gas supply  Interruptions and security issues with Libya (pipe, LNG), Egypt (pipe to Israel), and Yemen (LNG)  No issues with Algeria, Qatar and Egyptian LNG  Probably a higher priority for using gas for domestic development  Iran ?©© OECD/IEA 2010 OECD/IEA - 2012
  18. 18. LNG and security of gas supply  Advantages  LNG is flexible, does not depend on one producer  LNG can provide short-term relief (sometimes at a cost) if import infrastructure is there  LNG available under long-term or short-term, can sometimes be redirected  Twice as much regasification capacity as liquefaction capacity  Potential issues Increasing importance of Dependency on some maritime routes Qatar, which holds most of the flexible LNG volumes Based on capacity existing and under©© OECD/IEA 2010 OECD/IEA - 2012 construction
  19. 19. Thank you for your attention Anne-Sophie.Corbeau@iea.org©© OECD/IEA 2010 OECD/IEA - 2012

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