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La Russie: Gant gazier face
un march en volutionAnne-Sophie Corbeau, Senior gas expert
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Setting the sceneWhat happened in 2011 on global gas markets
World gas demand increased by a modest 2% in 2011
Lower than the 2.8%/y over the past decade
Gas demand increased in all regions but OECD Europe
China was by far the fastest growing market with 21% in 2011
Russia was still on a growing path
Supply increased faster than demand
The increase was supported by the United States, Russia and
Qatar
Russias production reached its historical peak Production dropped in Europe and Africa
But LNG markets were still tight in 2011
Notably due to the surge in Japanese LNG imports
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What about Russia?
The largest holder of proven gas reserves
Russia was the largest producer in 2011, slightly ahead of
the US
Maybe slightly behind in 2012 due to a production decline
The second largest gas consumer behind the United
States
Production largely
dependent on
exports to Europe,
as well as to FSU
No exports to Asia
yet, besides LNG
Note: 2012 estimates.
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No convergence of global gas pricesAsian prices stand at a record
Regional gas prices are determined by their respective regional dynamics
Asian prices follow oil prices moves; but Japan and other countries would like to buy
at NBP or HH linked gas prices
North America is totally disconnected from other regions
European gas prices reflect a dual spot and oil indexation, no longer fully reflect pure
oil indexation
Source: ICE, EIA, IEA, German Customs, Japanese Customs.
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Russias biggest problem: its main market,
Europe, lost 10 years of demand
Although European gas demand recovered from the economic crisis
starting end-2009 (mostly due to lower gas prices), this did not last
Seasonally-adjusted gas demand has been declining since mid-2010,
in response to increasing gas prices and weak economy
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2012: Is there any floor for OECD
European gas demand? Despite a cold snap in February, 2012 does not look better
Demand dropped by an estimated 3% over the first 11 months
The fall can be mostly attributed to power and industry sectors
Power generation by source over January-November, 2012 versus 2011
Note: REN exclude hydro.
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Current gas prices barely make gas
competitive
US sends us
cheap coal
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Any hope for gas-fired plants over the
medium term?Europe power generation by source
Power demand increases slowly due to low GDP growth
Renewables generation (excl. hydro) more than doubles from 2010
There is less room for combustible fuels
Gas has to compete against coal-fired plants
But is disadvantaged due to high gas prices (and no meaningful CO2 price)
Towards a Golden Age of Coal and a Dark Age of Gas?
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By contrast, gas is catching up with coal
in the US power sector
Low gas prices are accelerating the penetration of gas in the power sector
The increase has been even higher in early 2012: generation from gas-fired
plants increased by 25% and coal dropped by 15%
2012 was exceptional with extremely hot summer, nuclear outages
Thanks for sending cheap coal to Europe!
This market is now closed to Russia (and any would-be LNG exporter)
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China - A growing need for imports
Gas demand grows in all sectors, except fertiliser producers
New sectors emerge such as transport
China needs to solve issues such as pricing and regulation
Imports to increase from ~30 bcm in 2011 to 113 bcm by 2017
Russia has been negotiating for a decade to export to China, but still disagrees on
the price
China has many alternatives: Central Asia, LNG, Myanmar, so Russia needs to act
fast to capture the next window of opportunity Biggest uncertainty: Chinese shale gas, myth or reality??
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FSU and North America are set to be the
largest contributors to additional supply
FSU is growing fast, driven by incremental exports, notably to China
North Americas gas production meets booming demand and some
LNG exports
China and Australia become significant gas producers European domestic production continues to decline
Incremental gas production, 2011-17
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Some hope in the medium term:
European imports are set to increase
60 bcm more than in 2011 needed in 2017, but only around 35 bcm more
than in 2010
Gas demand set to recover slightly over time
Even if we stay below 2010s levels by 2017
No additional gas from North Africa, nothing yet from the Caspian region,tough competition for LNG: this is actually playing in Russias advantage
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Russia and the CaspianThe interest is shifting to Asia
Yamal started producing late 2012, could produce up to 115 bcm/y by 2017
Turkmenistan is increasing exports to China
Shah Deniz-II (hopefully) on track to produce in 2018
Question marks on other Russian projects: Far East/East Siberian projects,LNG (Chayanda -> LNG)
2017+2017+
2017+
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Middle Eastern exports are not a threat
to Russia over the medium term
0
100
200
300
400
500
600
bcm
Bahrain Iran Iraq Jordan
Kuwait Oman Qatar Saudi Arabia
Syrian Arab Republic United Arab Emirates Yemen
Most countries are struggling to develop their gas fields due to difficult
fields combined with low domestic gas prices
Qatar is the exception
Iraq is the wild card, but holds huge undeveloped resources and could
easily use flared gas
Net exports will go down over the medium term
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Unconventional gas production in 2011Already 16% of global gas supply
Half of the worlds unconventional gas production comes from tight
gas; shale gas is catching up but remains a North American story
It has already had an impact on gas markets prices (renegotiation of
contracts), future supply/trade (less LNG imports, possibility of US
exports), and global interest in shale gas
North AmericaTight ~ 217 bcm
Shale ~ 225 bcm
CBM ~ 55 bcm
Latin AmericaTight ~ 2 bcm
EuropeCBM < 1 bcm
FSUTight ~ 20 bcm
CBM < 1 bcm
Middle East & Africa
Tight gas > 3 bcm
AsiaTight ~ 35 bcm
CBM ~ 5 bcm
AustraliaCBM ~ 6 bcm
Note: US unconventional gas numbers revised following the release of AEO 2013. China: CMM excluded.
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Want to know more?
The Medium-Term GasMarket Report 2012 can be
purchased online at:
www.iea.org
Thank you for your
attention!
Questions and comments:
http://www.iea.org/http://www.iea.org/