понеделник, 18 май 2015 г.

Issue 130 - Newsletter OGE&P: Diversification of Gas in Bulgaria and the SEE possible until the end of 2016



The allegation might seem far fetched and unrealistic in light of the fact, that before 2019 there will be no Azeri or Black sea gas on the market= Recent developments however underscore the opposite – diversification in SEE is within reach sooner that normally believed.
New quantities emerged on the gas market after the reverse gas flows came into play. The practical denouncement of the restrictions on re-export of Russian gas as well as increased indigenous production contributed in their own way. But the headline grabber was news that US producers will start exporting shale gas to Europe at the end of this year.
More than 60 bcm of liquefied shale gas will reach EU shores by 2020, which will not on;y make of the shortfalls in EU production but will comprise more than 50% of the volumes that Gazprom and Statoil currently sell.
The basic quantities have been already contracted, with the bulk of the US shale gas going to hubs in the UK, Holland, Italy and Germany. But sufficient volumes will be left for sale in South East Europe.
Whereas the issue of the entry point of US LNG gas from the North is resolved with two LNG terminals already in place, the entry point in SEE is still open – with new projects on the drawing board and two existing terminals that could be used in the interim.
Hooking up to the global LNG market is an essential factor for the stability and security of gas supplies in the region as most of the dynamics in the global gas market are due to take place in the global LNG segment. This makes access to LNG imports a must for an optimal and stable gas source mix. 
Prices in Asia are remaining lower than in Europe and the forecasts are for more of the same or for price alignment in the mid term.
The entry into operation of the Sabina Pass terminal in the US will add credence to the comments made at highest US official levels – that US shale gas us ready to compete in Europe and Asia with incumbents.
The Europeans will have a choice whether to pay for US shale gas or start producing their own, including through fracking.
Those that still doubt that US shale gas LNG will be able to compete on price with Russian and Norwegian gas are wrong. The first contracts are already signed and commitmenta made for over 30 billion cubic meters of US shale gas. There is no way that would have happened in the most competitive segments of the EU market with prices not competitive to Gazprom.
The main reason is that whilst Gazprom production costs have risen, due hiking overheads associated with the strategic  “streams” whims of Kremlin, those of the American companies are steadily dropping, thanks to economies of scale, the link with shale oil and mostly because of technological advances,
There is one thing certain – the European consumers will benefit. Soon to see,

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