Natural gas for ukraine russia and europe where next
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Natural gas for Ukraine, Russia and Europe: where next? PowerPoint PPT Presentation


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Natural gas for Ukraine, Russia and Europe: where next?. Simon Pirani Senior Research Fellow Oxford Institute for Energy Studies International Security Forum, Lviv, 16 April 2010. MAIN POINTS. The impact of economic crisis on the European gas market

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Natural gas for ukraine russia and europe where next

Natural gas for Ukraine, Russia and Europe: where next?

Simon Pirani

Senior Research Fellow

Oxford Institute for Energy Studies

International Security Forum, Lviv, 16 April 2010


Main points

MAIN POINTS

  • The impact of economic crisis on the European gas market

  • The effect of crisis, and recovery, on Russia and other CIS producers

  • Ukraine’s gas trade after the 2009 ‘gas war’

  • Prospects for international cooperation


Observed gas demand oecd europe bcm it may return to pre crisis levels only in 2013 14

Observed gas demand, OECD Europe (bcm) It may return to pre-crisis levels only in 2013-14

Source: IEA


Changes in the european market oil linked prices may not be with us forever

Changes in the European marketOil-linked prices may not be with us forever


Natural gas imports to oecd europe first nine months of the year bcm

Natural gas imports to OECD Europefirst nine months of the year, Bcm

Russia lost market share


Natural gas for ukraine russia and europe where next

A very different outlook for Russia and Gazprom

Worries about a ‘supply squeeze’ have gone. Now there are questions about long-term demand. Gazprom’s big projects are being delayed ...

Gazprom will face competition in Europe from LNG...

Russia’s dominance in central Asia has been undermined by the Turkmenistan-China pipeline ...

In Russia, Gazprom is under pressure from the oil companies and Novatek ...


Main sources of supply to russia s gas balance 2008 2009 bcm

Main sources of supply to Russia’s gas balance, 2008-2009 (bcm)


Turkmen gas exports 2008 2011 bcm

Turkmen gas exports, 2008-2011 (bcm)


Natural gas for ukraine russia and europe where next

Ukraine after the January 2009 ‘gas war’

  • Nord Stream will be built and Ukraine’s bargaining power will be reduced

  • Ukraine will pay European-linked prices for imports

  • Gas consumption must be cut – by energy-saving, not industrial slump

  • Production could be increased


Natural gas for ukraine russia and europe where next

Russian gas export capacity to Europe up to 2015: transit via Ukraine could be reduced


Ukraine s demand collapse 2009 monthly consumption as of same month in 2008

Ukraine’s demand collapse, 2009 monthly consumption, as % of same month in 2008

Demand destruction concentrated in industry, but slowly recovering since the spring

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Natural gas for ukraine russia and europe where next

Ukraine’s 2009 gas imports problem was converted into a cash problem

* Source: energy ministry, Naftogaz. ** Assuming oil at $70/bbl

... the IMF counted $3bn Naftogaz operating deficit as part of Ukraine’s fiscal shortfall

But what will happen in 2010?


Europe ukraine and russia areas of possible cooperation

Europe, Ukraine and Russia: areas of possible cooperation

TRANSIT AND STORAGE:

How could a consortium work to the benefit of all?

Could Ukraine become a storage provider?

REDUCING CONSUMPTION:

In industry, it will depend on sourcing investment

Municipal services reform is hard (in Russia too)

What about price reform, and Naftogaz structure?

INCREASING GAS PRODUCTION IN UKRAINE:

What type of investment environment?

The more transparency, the better

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