Energi och gas ivår omvarld. Thina Margrethe Saltvedt, Chief Analyst Macro/Oil (Ph. D.) April

Transcription

1 Energi och gas ivår omvarld Thina Margrethe Saltvedt, Chief Analyst Macro/Oil (Ph. D.) April

2 US shale gas soon aiming for new markets

3 higher oil and natural gas prices Shale formations need constant drilling of new wells to level production: Typical production curves for shale and conventional wells Source: PIRA and IEA 3

4 Potential Environmental Impacts of Fracking 4 Source: PIRA

5 Growth in shale gas production at Marcellus vs Haynesville Source: EIA 5

6 Breakeven NYMEX prices for key lower 8 shale gas plays (excludes acreage) 6

7 Shale oil and the 10 largest shale gas reserves (in circles tcf) , Source: EIA

8 Most likely US LNG export terminals by key shale plays US potential export volumes 8 Source: PIRA

9 New LNG supply will begin to surge at the same time that Japan could be sharply reducing LNG demand 9 Source: PIRA

10 Long term US natural gas prices fallen markedly lately triggers the use of Natural Gas as the fuel for future investements Source: Bloomberg and Nordea Markets

11 Natural gas demand in selected regions China biggest potential World natural gas demand by sector power generation by far the largest sector Source: IEA

12 Gas use in transportation not a large share of the total fuel market before Number of vessels Natural gas fuelled ships Source: DNV, PIRA and Nordea Markets

13 Shale gas and LNG capacity can change the European gas market, but we will still be highly dependent on Russian gas in many years to come Source: Ingram Pinn, Financial Times

14 EU natural gas supply/demand balance NPS Source: IEA

15 Russia has used the gas weapon before 175 GBp per Therm Natural Gas, National 150 Russia cut gas supply to Ukraine Balancing Point, green Gas volumes reduced Source: Reuters EcoWin 15

16 Energy security high on the agenda, but still highly dependent on Russia EU s natural gas imports from the country of origin Natural Gas 31.8% 28.2% Russia Norway Algeria Qatar Nigeria Libya Trinidad and Tobago Egypt Turkey Others Source: Ingram Pinn, Financial Times The natural gas market is regional and transported via pipeliens that are goegraphically fixed. This makes the natural gas market more exposed to sypply disturbances as it ismuch less flexible 16 Source: EU, Eurostat 2010 figures

17 Ukraine a vital transit country for natural gas to Europe 6 reasons why the gas market is less exposed than in of 8 major gas pipelines from Russia to Europe carry gas via Ukraine 15% of all EU gas imports Crimea Nord Stream Pipeline Access to LNG Mild weather heating demand lower Higher European stockpiles Supply cuts stronger impact in the winter Natural gas demand at levels not seen since late 1990s 17 Source Map: Wikipedia

18 The demand for Russian gas has declined as som gas hass been subsituted by renewables and total energy demand has fallen EU energy consumption Russia has the biggest gas reserves in the world Million tonnes oil equivalent Renewables Nuclear Natural Gas Hydroelectricity Coal Oil 80% of Russian gas exports to the EU used to og via Ukraine, but after the 2009 gas crisis the construction of the Nord Stream pipeline this share has fallen to 50%. 18

19 Russia s dependence on oil and gas exports has increased Russia will be careful cutting oil and gas supplies Around 65% of total export from oil and gas Czech Republic, Hungary and Slovakia Eastern Europe 24% Germany 24% Finland, Greece, Austria and Belgium Other Western Europe 10% UK 6% France 6% Italy 11% Turkey 19% Russia sends about 76% of its natural gas pipeline exports to clients in Western Europe (LNG 7.5% of total all cargoes to Asia) 19 Source: BP, EIA, Eastern Block Energy

20 EU Shale boom cuts into LNG and Russian import Shale gas production No shale gas production Norway LNG North Africa Russia Norway North Africa LNG Domestic Shale Boom Domestic Russia 20 Source: Quadrilla

21 Comparison of assumed risked shale gas resources in the EU varies widely among different sources 21 Source: Poyry and Cambridge Econometrics

22 2013 Comparison of shale gas production costs in the EU Long run MC of the EU shale gas production 22

23 Shale gas and increased LNG capacity imply major changes in the European gas market: Away from oil linked pricing Increased flexibility Price smoothing between continents US gas exports USD/mmBTU Natural Gas Price Trends New wave of LNG capacity being completed Henry Hub (US) NBP (UK) Japan LNG import Source: Nordea Markets

24 Sweden consumes only 0.4% of global energy consumption effect of Russian turbulence will hit the transportation sector hardest Per cent In boe Oil Natural gas Coal Nuclear energy Hydro electricity Renewables Source: BP and Nordea Markets 24

25 Contact details: Thina Margrethe Saltvedt Chief Analyst Macro/Oil (Ph. D.) Commodities Research Nordea Markets Phone: Mobile:

26 Nordea Markets is the name of the Markets departments of Nordea Bank Norge ASA, Nordea Bank AB (publ), Nordea Bank Finland Plc and Nordea Bank Danmark A/S. The information provided herein is intended for background information only and for the sole use of the intended recipient. The views and other information provided herein are the current views of Nordea Markets as of the date of this document and are subject to change without notice. This notice is not an exhaustive description of the described product or the risks related to it, and it should not be relied on as such, nor is it a substitute for the judgement of the recipient. The information provided herein is not intended to constitute and does not constitute investment advice nor is the information intended as an offer or solicitation for the purchase or sale of any financial instrument. The information contained herein has no regard to the specific investment objectives, the financial situation or particular needs of any particular recipient. Relevant and specific professional advice should always be obtained before making any investment or credit decision. It is important to note that past performance is not indicative of future results. Nordea Markets is not and does not purport to be an adviser as to legal, taxation, accounting or regulatory matters in any jurisdiction. This document may not be reproduced, distributed or published for any purpose without the prior written consent from Nordea Markets.