Baku, Azerbaijan, Apr. 26
By Elena Kosolapova – Trend:
Gas imports to Europe will reach historic high by the end of 2018, BMI Research Senior Oil and Gas Analyst Emma Richards said.
She made the remarks during ‘The 2nd SOCAR International Caspian and Central Asia Downstream Forum – Trading, Logistics, Refining, Petrochemicals’, held in Baku Apr. 26.
She noted that gas consumption in Europe is steadily growing, while domestic production is decreasing, and this will lead to an increase in gas imports.
Richards noted that more stable external environment will help support industrial production in Europe in 2017, and this will lead to an increase in gas consumption.
At the same time, increased political uncertainty will be impeding economic growth in the longer term, curbing the growth in demand for gas, she added.
The analyst noted that after 2017, the maturity of European gas fields, strict legal regulation and limited investment will lead to decrease in gas production in Europe.
In particular, the change in tax, legal and regulatory conditions in the UK and the Netherlands, the region’s heavyweight producers of gas, creates the risks of declining production, she added.
There is potential for development of shale gas production in the region, however, the prospects of this direction are still unclear, she said.
At the same time, Richards noted that LNG (liquefied natural gas) imports to Europe are projected to increase by 50 percent by 2021, adding that Australia and the US will be the main LNG suppliers.
Although pipeline supplies will remain the main source of gas for Europe, an increase in LNG supplies will affect price formation and will force pipeline gas suppliers to become more competitive, according to the analyst.