OVERVIEW OF GAS SUPPLY TO EUROPE. Andrew Potter World Bioenergy Association

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1 OVERVIEW OF GAS SUPPLY TO EUROPE Andrew Potter World Bioenergy Association

2 EU Gas Consumption In 2011 natural gas covered 24% of the primary energy supply in EU 27. The total primary energy demand was in the size of 1,654 Mtoe. Renewables came up with 11.1% in total 7.8% biomass (of total) (Source IEA key figures 2013)

3 Natural Gas Consumption EU Volume (bcm) Imports were 22% of total consumption in Indigenous Imports 3"

4 Gas Supply in Europe 2011 bcm % Domes:c Net imports Total consump:on Source: IEA, stat. In 2011 EU 27 consumed 519 billion cubic meters of gas, of which 65% was imported.

5 Utilisation of Gas in Europe Main use is for residen2al and commercial hea2ng, followed by genera2on of electricity / CHP, industry ca 20%. bcm share Electr. and CHP plants % Industry % Residen:al and commercial users Others (heat plants, Agric., transport, non energe:c use) % 80 15% TOTAL %

6 SOURCES OF EU NATURAL GAS

7 Gas Supply and demand : Global Overview Main gas producers bcm Main net importers of gas bcm USA 681 Japan 120 Russia 656 Germany 70 Iran 158 Italy 68 Canada 157 France 43 Norway 115 UK 37 China 107 China 36 Netherlands 180 Ukraine 32

8 Russia Largest Source of Imports to EU 1,800 Natural Gas Supply in the EU ,600 1,400 1,200 TWh 1, Indigenous Russia Norway Algeria Qatar Other 8"

9 Major European LNG Terminals Qatar is top LNG importer supplying 50% of total. More than 96% of LNG originates in Non OECD countries.! 9"

10 Gazprom - Russia s state-owned gas company In 2013 Europe purchased 140 bcm of Natural Gas from Gazprom Since 1970 Russian Natural Gas imports to the EU has grown from zero to 140bcm pa today Russia Supplies 25% of Natural Gas to Europe Annually Produces 17% of all natural gas globally Russia s largest company Became state controlled in % of profits come from Europe Made a loss on domestic sales every year before 2004 Gazprom customer prices 2006 ($ per 1000 cubic meters) Germany - $250 Poland - $290 Ukraine - $130 Russian domestic market - $49 10" Source: Gazprom

11 Destination of Russian Natural Gas (2006) Total cost $66 Billion in 2006 Source: Gazprom 47% by volume consumed by Germany and Italy 11"

12 Supply by Country 1000 Natural Gas Supply in the EU TWh Other Katar Algeria Norway Russia Indigenous 0 Germany Italy Poland Hungary France Austria 12"

13 Russian Gas Disputes Post Dispute over $1.3 Billion gas bill with Ukraine Results in gas supply halted to Ukraine for 3 days 2009 Dispute over price of gas, $2.4 Billion debt with Ukraine and accusations of illegal siphoning of gas. Results in gas supply halted to Ukraine for 20 days. Hungary, Romania, Poland, Bulgaria report pressure drop in supply which in turn effects Turkey, Greece and Macedonia shipments. The UK also reports that it made preparations to use gas reserves. 13"

14 Main Russian Gas Pipelines to Europe Roughly 70bcm passes through Ukraine pipelines each year (40% of total) Proposed South Stream pipeline could replace Ukraine EU supply route 14" Picture: 9 th May 2014

15 Recent Timeline May 2014 Wednesday 7 th May 2014 Ukraine misses deadline to pay $3.5 Billion gas to Russia. Thursday 8 th May 2014 Russian Energy Minister, Alexander Novak announces Russia is introducing a pre-payment regime from the 1 st of June for Ukraine. Ukraine refuses to pay increased price from $ (per 1000cm) to $ Gas Infrastructure Europe states that with Gas stockpiles at about 47%, Europe would be able to last about a month without interrupted supply. Friday 9 th May 2014 G7 leaders including Britain, US and other European leaders state We will be drawing up an emergency winter response if Russia threatens its gas supplies, which will be discussed again at the G7 Heads of State meeting next month. Saturday 10 th May 2014 Gazprom Executives state that Ukraine owes a total of $22 Billion 15"

16 Thank you for your attention!