Russian gas at European energy market: Why adaptation is inevitable
Abstract Economic crisis of 2009–2010 plus steady decarbonisation of the European Union (EU) energy policy decrease EU energy demand while gas supplies to the EU continue to increase as well as its multiplicity. Thus competitive niche for gas in Europe tightens, especially for Russian gas supplies with rather non-flexible contractual structures and pricing mechanisms such as long-term gas export contracts (LTGEC) with oil indexation. On top of this, Third EU Energy Package changes the whole architecture of the wholesale EU internal gas market. So risks and uncertainties for oil-indexed LTGEC within this tightening market niche for gas increase. To effectively address them, LTGEC need to become more flexible and adaptable. Gazprom has recently started such adaptation of its LTGEC. Whether this will stay as a temporary step-back or will become company's new regular policy towards more flexible contractual structures and pricing mechanisms in Europe?
Vertical Natural Gas Transportation Capacity, Upstream Commodity Contracts and Eu Competition Law
Bibliography. Introductory Chapter. EU Natural Gas Markets and Long-Term Contracting - An Overview of Economic and Political Aspects. Security of Supply in the European Union. Key EU Gas Market Regulation Relating to Long-Term Contracting. The Application of EU Competition Law in Natural Gas Markets - Background and Developments. Compatibility of Vertical Natural Gas Transportation Capacity, Commodity Contracts and EU Competition Law. Security of Supply as Objective Justification. Conclusion.
Investments in Gas Pipelines and LNG Infrastructure: What impact on the security of supply? INDES Working Paper No. 3, 1 March 2004
This paper addresses the question of the infrastructure investment required for gas pipeline and liquefied natural gas (LNG) connections to meet growing gas demand in an enlarged EU over the next 20 years. Several issues are presented, bearing in mind the major objective of the security of supply for EU countries. o First, to set the scene, recent projections of gas demand in an enlarged EU are presented along with the corresponding need for additional imports. o Then a scenario is developed showing possible supply routes to meet the import gap, relying on increasingly remote routes. An impressive bill of $150 to 200 billion will have to be paid for extending and building the required infrastructure in pipeline links and LNG-receiving facilities. o The expected major development of LNG markets is subject to a particular discussion, as far as the progressive globalisation of this market and its inherent flexibility provide major advantages in terms of the security of supply, despite more costly infrastructure than pipeline links. o The impact of technological progress is expected to reduce both capital investment and unit transport costs, offering access to new supply opportunities. o Finally, the question of major obstacles to the realisation of the required huge investments in gas infrastructure over the next 20 years is addressed, opening hot debate on the subjects of future gas price, market liberalisation and financing issues.