OIL AND GAS SUPPLY-DEMAND SCENARIOS FOR EUROPE

UP TO 2030

Manfred HafnerObservatoire Méditerranéen de l’Energie

NEEDS Research Stream 1c“New Externalities associated to

the Extraction and Transport of Energy”

NEEDS Forum 2Energy Supply Security – Present and Future Issues

Krakow, 5-6 July 2007

Research Stream 1c“New Externalities associated to the extraction

and transport energy”

OIL

NATURAL GAS

ELECTRICITY

HYDROGEN

Supply/Demand scenariosFlows & RoutesCritical passagesNew technology & regulationBurdensImpactsRisk AnalysisEconomic valuation

Gas Supplies to EU-15

Algeria4520

U.K. 700 Netherlands1800

Libya1310

Iran23000

Qatar 14400

Russia48100

6,000 km

Turkmenistan2860

4,000 km2,000 km

Abu Dhabi6000

Norway3000

Nigeria3510

Egypt1660

Trinidad 330

Venezuela 4000

Oman800

N2005eCons. 502 bcm

Imports 290 bcm

NE

126 bcm Russia43%

S

78 bcm Norway27%

SE

7 bcm Gulf2%

SEMCs 68 bcm (23%)56 bcm Algeria

6 bcm Libya6 bcm Egypt

Other Africa11 bcm Nigeria (4%)

2005e*: Gas Supply to EU-25

Source: OME, May 2006 * first 2005 estimates

*Baseline scenario ‘’European energy scenarios on key drivers, DG-TREN, Sept 2004’’

EU-25 Gas Demand (by sector)

0

100

200

300

400

500

600

700

800

2000 2005 2010 2015 2020 2025 2030

Industry

Bcm

Power

R&C

=> Driven mainly by power generation

126

125

287

240

423

707

172

180

2.8%/y

1.2%/y

1.1%/y

Sources of incremental annual demand between 2000 and 2030

Power sector57%

Industrial sector13%

Services6%

Households18%

District heat & other

6%

Source: EC DG TREN

Sources of incremental annual demand between 2000 and 2030

Industrial sector13%

Services6%

Households18%

District heat & other

6%

Primarily competing against oil and electricity for space heating.Substitution effect not as strong as income effect

High energy prices more likely to induce energy efficiency improvements

High energy prices more likely to induce energy efficiency improvements

Sources of incremental annual demand between 2000 and 2030

Power sector57%

Competing against coal, nuclear & renewablesSubstitution effect stronger than income effect

Largest source of gas demand growth is the most sensitive to higher energy

prices!!

Largest source of gas demand growth is the most sensitive to higher energy

prices!!

Gas Demand forecasts for Europe,(in 2000, 2002, 2004 & 2006)

GasGas DemandDemand forecastsforecasts for Europefor Europe,,(in 2000, 2002, 2004 & 2006)(in 2000, 2002, 2004 & 2006)

0

100

200

300

400

500

600

700

800

2002 2010 2020 2030

WEO 2006

TOTAL

NON-POWER

POWER

WEO 2004

WEO 2002

WEO 2000

WEO 2006

WEO 2004

WEO 2002

WEO 2000

WEO 2000

WEO 2006WEO 2002WEO 2004

Mtoe

Source: IEA, WEO 2000, 2002, 2004 and 2006

EU-25 Natural Gas Imports

* Strongly increasing gas import requirements* High uncertainty due to development in: - demand - domestic production

Source: European energy scenarios on key drivers, DG-TREN, Sept 2004

MAIN GAS REGIONS FOR EUROPEAN SUPPLY

NORTH AFRICA : Algeria, Libya, Egypt

NORTH SEA :Norway

RUSSIA

THE CASPIAN AREA AND CENTRAL ASIA: Azerbaijan, Kazakhstan, Turkmenistan, Uzbekistan

THE GULF : Iran, Iraq, Oman, Qatar, Saudi-Arabia, UAE, Yemen

WEST AFRICA : Nigeria, Angola

SOUTH AMERICA : Trinidad & Tobago, Venezuela

Future gas export potential for Europe

LIBYAEGYPT

IRAN

TURKMENISTAN

ALGERIA

RUSSIA196

166

139

100 95 94 81

57 81 110 115

5 12 25 38 5 23 28 28

5 20 3535

7 44 68 88

1313

11213845

W. A

FRICA

NORWAY

QATAR/ UAE/ OMAN/ YEMEN

207

AZERB.

304 bcm

447 bcm

619 bcm

695 bcm

2005

2010

2020

2030

IRAQ

1666

T&T + VENEZ.

LIBYAEGYPT

IRAN

TURKMENISTAN

ALGERIA

RUSSIA and Central Asia196

166

139

100 95 94 81

57 81 110 115

5 12 25 38 5 23 28 28

5 20 3535

7 44 68 88

1313

11213845

W. A

FRICA

NORWAY

QATAR/ UAE/ OMAN/ YEMEN

207

AZERB.

304 bcm

447 bcm

619 bcm

695 bcm

2005

2010

2020

2030

304 bcm

447 bcm

619 bcm

695 bcm

2005

2010

2020

2030

IRAQ

1666

T&T + VENEZ.

Algeria : Gas Export Projects

ALGER

Hassi R’Mel

In Amenas

Skikda

-

EMG

PDFG

ALGERIA

MOROCCO

TUNISIA

SPAIN PORTUGAL

ITALIY

SICILY

Algeria-Italy

Enrico Mattei Gasline (EMG, ex-Transmed)

25 to 31 bcm LNG Algeria

27 to 38 bcm

Algeria-Spain (Medgaz)

8 to 16 bcm

Pedro Duran Farell Gasline (PDFG, ex-GME)

11.5 to 18-20 bcm

Algeria-Italy via Sardinia Corsica

(Galsi)

8 to 16 bcm

LNG (G.Touil)

5 bcm

Existing Gaslines

Gasline Projects

Existing LNG Plant

LNG Plant Projects

-

TSGPNigeria-Algeria to Europe

In Salah

TegentourReg

Ahnet

Arzew

BeniSaf

Algeria Export Gas Capacities

Export gas infrastructure

2004 2010 2020 2030

EMG & Expansion (ex-Transmed)

25 27 31 31

PDFG & Expansion (ex-GME)

11.5 18 18 20

LNG Plants & Expansion 27.5 38 38 43

Medgaz Pipeline Project   8 16 16

Galsi Pipeline Project     16 16

TOTAL 64 91 119 125

R.Nouss

TFTOhanet

Hamra

Source: OME, May 2006

Source: OME, May 2006

ALGER

Arzew

Skikda

-Marsat El Braga

Zelten

Hatiba

EMG, ex-Transmed

ALGERIA

LIBYA

MOROCCO

TUNISIA

SPAIN PORTUGAL

ITALIY

TRIPOLI

Wafa

Bassin de Ghadames

SICILE

Bouri

LNG Libya1 to 9-14 bcm

Libya-Italy(Greenstream)

8 to 16-24 bcm

Existing Gaslines

Gasline Projects

Existing LNG Plant

LNG Plant Projects

Libya-Tunisia2 bcm

Hassi R’Mel

Libya Gas Export Capacities (bcm)

Export gas infrastructure 2005 2010 2020 2030

LNG Plant & Expansion

1 4 9 14

Libya to Tunisia Gasline

  2 2 2

Greenstream 8 8 16 24

TOTAL of the projects 9 14 27 40

LIBYA : Gas Export Projects

Egypt : Gas Export Projects

DamiettaSEGAS (UFG)

2x6.9 bcm

Gasline ProjectsExisting Gaslines

Existing LNG PlantLNG Plant Projects

Taba

Capacities of Egypt Gas Export Projects (bcm)

Source : Petroleum Economist & OME, May 2006

Trans Machrek Pipeline

3 to 10 bcm

IdkuELNG (BG)3x4.8 bcm

* these figures refer to possible projects but which are not counted in the total

2004 2005 2010 2020 2030

SEGAS (Union Fenosa, ENI) at Damietta

- 6.9 2x6.9 2x6.9 2x6.9

ELNG (BG/Petronas/GdF) at Idku

- 2x4.8 2x4.8 3x4.8 3x4.8

LNG (Shell) 5.2* 5.2* 5.2*

Trans Machrek pipeline 1.1 1.1 3 5 (10*)

10

TOTAL of projects 1.1 18 26 33 38

SCANDINAVIAN GAS NETWORK : EXISTING & PLANNED GAS ROUTES

TALLINNSTOCKHOLM

COPENHAGEN

SWEDENNORWAY

FINLAND

Shtokmanovskoye

Haltenbanken

ATS

Troll

Yamal - Europe

Fra

np

ipe

Eu

rop

ipe

II

Eu

rop

ipe

I

DENMARK

Existing Gas Pipeline

Gas Pipeline Project

No

rpip

e

Eastern axe 45 bcm

Norpipe 11 bcm

Europipe I 13 bcm

Europipe II 21 bcm

Western axe 28 bcm

Zeepipe 13 bcm

Franpipe 15 bcm

Frigg Frigg/Vesterled

13 bcm

Asgard fields/ ATS

21 bcm

Snohvit

Nord Stream

27-55 bcm

Ze

epip

e

Ormen Lange

Ormen Lange/Britpipe22 bcm

Easington

Bacton

NE

GP

HELSINKI

BBL 20 bcm

Shtockman LNG

23 bcmSnohvit LNG

6-11 bcm

Murchison

Balgzand

Isle of Grain

5/10

Source: OME, May 2006

Norwegian Gas Export Capacity (bcm/yr) CAPACITY 2004 2010 2020 2030Existing Mainland Europe: Europipe I 13 13 13 13Europipe II 21 21 21 21Franpipe 16 16 16 16Norpipe 11 11 11 11Zeepipe I 13 13 13 13UK Frigg/Vesterled 13 13 13 13

sub-total 87 87 87 87under construction LNG Snovhit 6 6 10Ormen Lange Gas Pipe/Britpipe to 22 22 22 Easington (UK)Use of existing UKCS infrastructure 10 10 10

Total Capacity 87 125 125 129

RUSSIA : EXISTING & PLANNED GAS ROUTES

YAM

AL

WARSAW

RUSSIA

KAZAKHSTAN

BovanenkoBARENTS

SEA

BALTIC SEA

Yamal - Europe

Yamal I- Europe 29 to 32 bcm

Yamal II - Europe+32 bcm

HELSINKI

TALLINN

St Petersburg

TYUMEN

UKRAINE

MINSK

Urengoy

MOSCOW

Blue Stream 16 bcm

Shtokmanovskoye

STOCKHOLM

North

ern

Route

Centra

l Route

Souh

ern

Route

Shtokmanovskoye Europe Baltic Pipeline

18-35 bcm

Kondratki

Izmail

Uzhgorod New Transit Line

through Ukraine 28 bcm

Shtockman LNG

23 bcm

Nord Stream

Gas Pipeline

27-55 bcm

Aleksandrov-Gay

Novopskov

Yamal LNG

25 bcm

* This capacity is less likely and has not been included in the Total.

CAPACITY OF RUSSIAN GAS EXPORT INFRASTRUCTURE to EUROPE

Source: OME, May 2006

CAPACITY 2004 2010 2020 2030I - Existing Pipelines Uzhgorod (Ukraine/Slovakia) 100 100 100 100Beregovo (Ukraine/Hungary) 15 15 15 15Khust (Ukraine/Romania) 5 5 5 5Izmail (Ukraine/Roumania) 28 40 40 40Brest (Belarus/Poland) 6 6 6 6Khodnovichi (Ukraine/Poland) 5 5 5 5Yamal-Europe Kondratki (Belarus/Poland, 1st line) 23 32 32 32lmatra (Finland) 9 9 9 9Blue Stream (Turkey) 16 16 16 16TOTAL (FIRM +CONSTRUCTION) * 207 228 228 228II- Planned/Potential Developments & Expansions Yamal-Europe Kondratki (Poland) II-new (16)* (32)* (32)*North European Gas Pipeline 27,5 55 55TOTAL to EUROPE * (Existing +Planned /Potential) 207 256 283 283III- Planned/Potential to other markets (US & Asia)Export LNG (Shtockman Murmansk LNG) to US 23 23Export LNG (Yamal LNG) to US 25Export LNG (Ust Luga LNG) to Canada 5 5Export LNG Sakhalin1 (to Asia) 13 13Export LNG Sakhalin2 (to Asia) 13 13 26Pipeline to Asia (China, Korea, Japan...) 40 80GLOBAL EXPORT Capacity from RUSSIA 207 269 377 455

Russia: important gas import potential from Central Asia

AZERBAIJAN

 

OME, Sept 2005

South Eastern European gas pipeline projects

TGI

Nabucco

Blue Stream

South Stream

Nabucco

North Field

Amman

DAMASCUS Homs

Aleppo

Ceyhan

Ankara

ISTANBUL

RIYADHMUSCAT

ABU DHABI

SAUDI ARABIA

OMAN

UAE

QATAR

Basra

BAGHDAD

BAHRAIN

KUWAIT

Yanbu

Kayseri

Sur

Izmir

Port Said Alexandria

Marmara

TURKEY

Dubai

Sohar

Das Island Dolphin Project

Gulf: LNG Export Projects

Assaluyeh

2005 by 2010- 2012

Countries Existing LNG

LNG Projects

Total cap.

of which to

Atlantic Basin

QATAR 34 69 103 54

UAE 8 4 12 3

OMAN 10 5 15 3

IRAN   27 27 20

TOTAL 51 112 156 81

Cap. (Mt/y)

Qatargas I (tr.1, 2&3) 9.6

Qatargas II Tr4&5 (ExxonM to UK) 15.6Qatargas III Tr7(Conocco to US) 7.5

Rasgas I (tr.1&2) 6.6Rasgas II (tr. 3 &4) 9.4

Rasgas II Tr6-7(ExxonM to US) 15.6

Source: OME, May 2006

Cap. (Mt/y)

Iran LNG (BP/Reliance India) 9

Pars LNG (Total/Petronas) 10

NIOC LNG (BG/ENI) 9

Persian LNG (Shell/Repsol) 9

Rasgas II (new tr. 5) 4.7

Qatargas IV Tr8(Conocco to US) 7.8

Cap. (Mt/y)

Das Island (1, 2 &3) 5.7

Das Island (Tr.4) 3.3

Cap. (Mt/y)

Oman LNG (Tr.1& 2) 7.0

Oman LNG (Tr.3) 3.3

bcm/yr

GAS CORRIDORS TO EUROPE

Oil Supplies to EU25

Source: OME, 2006

N2005Consumption 670 Mt

Gross Imports 627 Mt

NE

222 Mt Russia

36%

S

99 Mt Norway16%

SE

137 Mt Gulf

22%SEMCs 107 Mt (18%)29 Mt Algeria65 Mt Libya 3 Mt Egypt10 Mt Syria

Other Africa 44 Mt (7%)

17 Mt Amer.

4%

EU-25 Oil Imports

Source: European energy scenarios on key drivers, DG-TREN, Sept 2004

EU Oil Import scenario (in Mb/d)

Reference Case

AFRICA

MIDDLE EAST

NORWAY

RUSSIA

AMERICACASPIAN

0

2

4

6

8

10

12

14

2004 2010 2020 2030

Source:OME

Imports to Europe

2004: 11.6 Mb/d

AFRICA19%

AMERICA3%

CASPIAN4%

MIDDLE EAST23%NORWAY

20%

RUSSIA31%

2030: 12.6 Mb/d

AFRICA32%

AMERICA0%

CASPIAN11%

MIDDLE EAST26%

NORWAY2%

RUSSIA29%

Seaborne trade to increase

from 85% to 89%

Africa

Export Potential (Mb/d)

AlgeriaLibya

Angola

Nigeria

Other Africa

Egypt02468

10121416

2004 2010 2020 2030

Middle East

Export Potential (Mb/d)

IranIraq

Saudi Arabia

UAE

Turkmenistan Qatar

Other ME

05

1015

2025

3035

2004 2010 2020 2030

Qatar Kuwait

Caspian

Export Potential (Mb/d)

Azerbaijan

Kazakhstan

Turkmenistan

0

1

2

3

4

5

6

2004 2010 2020 2030

NORWAY

Demand

Export Potential

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2004 2010 2020 2030

RUSSIA

Demand

Export Potential

0123456789

101112

2004 2010 2020 2030

EU Crude Oil Imports by Transport Mode, 2004

North

Med

0

100

200

300

400

500

Ship Pipe Non Specified

Mill

ion

tonn

es

85%

15%

0.2%

EU crude oil imports by transport mode

EU Crude Oil Imports by transport mode (ref. case)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2010 2020 2030

Pipeline

Med. Ports

Atlantic Ports

Future evolution of EU crude oil imports by transport mode

EU Crude Oil Imports Flows – Summary 2004 Base Case (Mt)

N. America

L. America9

13

6

3

0.7

5

3417

4

36

44

35

20 95

22

30

5178

28

14

1074

5

Atlantic Med.Export

Import

Pipeline

256

Other Africa 19

8

79

46A

M

Caspian

10 13

Gulf

60 70

31

0.2

8

0.6

1

139

5675

23

65

54

23 65

25

30

8274

65

12

58

Atlantic Med.Export

Import

Pipeline

3

61

Other Africa 23

16

84

33A

M

Caspian

21 35

Gulf

55 105

3

Major EU Crude Oil Import Routes, 2030 (Mt), Major EU Crude Oil Import Routes, 2030 (Mt), REF CASEREF CASE

14

9

L. America

0.2

1

0.2

EU Oil Imports (2004)

EU Heavy Fuel Imports by Type and Case

0

5

10

15

20

25

30

35

40

2004 Low Case 2030 High Case 2030

Mt

Pipeline

Mediterranean

Atlantic

European Oil maritime routes

Source: ITOPF

Hot spots: the Ras Tanura –Rotterdam routePrimorsk

Leningrad Oblast (Russia)

Population (2002): 1669205

Area: 84500 kmqFrench Finistére

Bretagne (France)

Population (2004): 3020885

Area: 27208 kmq

Dover Strait

Nord-Pas-de-Calais (France)

Populaion (2004): 4027706

Area: 12414 kmq

South East England

Population (2004): 8095261

Area: 19096 kmq

Spanish Finistere

Galicia (Spain)

Population (2004): 2706126

Area: 29574 kmq

Ras Tanura

Eastern Province (Saudi Arabia)

Population (2004): 3360157

Area: 710000 kmq

Suez Canal

Egypt Regions around the Suez Canal

Population (2004): 1816200

Area: 22321 kmq

Nabeul Governorate

(Tunisia)

Population (2004): 694000

Area: 2788 kmq

Sicily Strait

Sicily

Population (2004): 5013081

Area: 25710 kmq

Tangier-Tétouan

(Morocco)

Population(2005): 2470372

Area: 11570 kmq

Gibraltar Strait

Andalusia (Spain)

Population(2005):7552978

Area: 87599kmq

Hot spots: the Novorossisk – Augusta route

Novorossisk

Kraj di Krasnodar (Russia)

Population (2004): 5125221

Area: 83600 kmq

Bosphorus

Istambul (Turkey)

Populaion (2005):

10018735

Area: 5170 kmq

Kocaeli (Turkey)

Population (2005): 1206085

Area: 3635 kmq

Aegean sea

Northern Aegean

Population (2004): 206000

Area: 3836 kmq

Southern Aegean

Population

(2004): 302000

Area: 5286 kmq

Augusta

Sicily

Population (2004): 5013081

Area: 25710 kmq

Crete

Population (2004): 601000

Area: 8336 kmq

Results of externality values associated to the fuel chain up to the EU border ready by September 2007

Operational externalities (extraction and transport)Accidental/probabilistic externalities (extraction and transport)

The NEEDS project does not specifically target “security of supply” issues, but rather “environmental externalities”

Research Stream 1c“New Externalities associated to the extractions and transport energy”

WP1. Methodological developmentsDefinition of concepts and general methodology of the project

WP7. Stakeholders consultations and dissemination

WP5. Models and tools by energy source

WP4. Quantitative global models - Long term energy scenarios based on policy lines- Adaptation of the POLES model to include risk assessment- Development of energy risks assessment model (ERA)- Quantitative analysis of policy recommendations

WP3. Long term policy linesQualitative analysis of energy policy

options and scenarios for the EU

WP2. Value of energy security Estimation of consumers’ risk aversion

and willingness to pay for security

WP6. Results and policy recommendations

5.1. Oil

5.2. Natural gas

5.3. Coal

5.4. Nuclear

5.5. Renewable energy sources

5.6. Electricity

5.7. Impact of accidents and terrorist threats

- External supply

- Internal supply

- Geopolitical risks

- Technical risks

- Economic & regulatory risks

5.8. Demand dimension of energy security

SECURE project proposal FP7: Security of Energy

Considering its Uncertainty, Risk and Economic implications