1. Recent developments with potential
impact on the gas markets in Europe
Rene Peters
Director Gas Technology
TNO Energy

2. Overview
Future role of gas in the energy mix
Import dependency of gas and oil around the world
Potential impact of Shale Gas and Oil
Challenges for the EU energy supply and industry
Impact on the LNG markets and imports in Europe
Is Europe prepared for a Russian – Ukraine gas crisis
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3. Let’s discuss some issues around gas…..
Oil & Gas Reserves:
Growth of world
population and
prosperity
Environmental impact
Climate change and
health of living
Independency:
Security of supply and
geopolitics
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4. World Primary Energy Demand development
the role of gas in the energy mix
From: IEA special report on gas 2011
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5. Is there still enough gas around the world?
World Proven Gas Reserves and replacement rate
From: IEA special report on gas 2011
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6. The world is increasingly producing unconventional gas
World Natural Gas Production by source
From: IEA special report on gas 2011
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Unconventional gas
Conventional gas
Unconventional oil
Conventional oil
mboe/d
5
10
15
20
25
1980 1990 2000 2010 2020 2030 2035
From IEA WEO 2012
Oil and Gas production in the US
IEA projections

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11. US oil and gas prices
• Not coupled
• Oil increasingly expensive
• Gas cheaper below 4$
Low gas price drives:
• Gas fuelled transport
• Re-industrialisation
• Investment in chemicals
• Discussion on gas export
Economic crisis

12. EU SUPPLY PICTURE
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13. Development natural gas prices
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Cost of
LNG transport

14. New resources of unconventional gas changes the energy landscape
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15. Latest EIA Estimates worldwide
technically recoverable resources
Region 2013 EIA (tcf)
Europe 470 Poland, France
North America 1685 Canada, US, Mexico
Asia 1607 China, Australia
South America 1430 Argentina
Russia 415 FSU
Sub Saharan Africa 390 South Africa
MENA 1007 Algeria
World total 7201
From: EIA technical recoverable shale gas and oil reserves – June 2013
(1 tcf = 28 bcm)
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16. EIA Unconventional gas in Europa
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17. Latest EIA Estimates for Europe
technically recoverable reserves
Country 2013 EIA (tcf)
Poland 148
France 136
UK 26
Norway 0
Denmark 32
Germany 17
The Netherlands 26
Spain 8
Romania 51
Europe total 470 tcf = 13 tcm
From: EIA technical recoverable shale gas and oil reserves – June 2013
(1 tcf = 28 bcm
TRR = technical
recoverable reserve)
(1 tcf = 28 bcm)
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18. EU Shale gas resource estimates show large variations
There is a need for a more coherent workflow to estimate resources
and more data from shale gas exploration wells
2011
2013
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19. Largest gas producing countries in 2035
From: IEA special report on gas 2011
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20. Change in Natural Gas Production by region
From: IEA special report on gas 2011
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UK and NL

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0%
20%
40%
60%
80%
100%
20% 40% 60% 80% 100%
Oil imports
Gas Imports
United States
China
India
European Union
Japan
2010
2035
20%Gas Exports
Net oil & gas import dependency in selected countries
From IEA WEO 2012

22. Development gas demand and supply in Europe
More import dependency
(LNG/Pipeline)?
Russia / Norway/Algeria?
Tight/Shale gas?
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Import dependency from Russia

24. Import of gas in Europe
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LNG import increasing

25. NEW LNG WAVE COMING?
OR: FID DOES NOT MEAN REALITY?
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A lot of new LNG capacity is built to supply to the US
But will never reach the US because of shale gas

26. Source: U.S. Energy Information Administration.
The Washington Post. Published on February 7, 2013[1].
[1] http://www.washingtonpost.com/world/rise-of-cheap-us-coal-in-europe/2013/02/07/3ae56870-7189-11e2-8b8d-e0b59a1b8e2a_graphic.html
Don’t forget coal as power source, replacing gas

27. Gas Production in the Netherlands
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From TNO: www.nlog.nl

28. Gas earnings in the Netherlands
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From TNO: www.nlog.nl

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Dutch gas reserves are depleting the next decade
(Future) Gas production profile NL
Groningen field
Small fields
Gas demand in NL
Export > < ImportFrom TNO: www.nlog.nl
Groningen looses its capacity as
a swing producer for NL and Europe

30. Challenges in European gas supply
The gas demand is expected to be steady or growing (~550 bcm/yr)
Indigenous production is in decline (~50%)
NL (80 bcm/yr) and NO (110 bcm/yr) are not able to increase the gas
production
EU countries are not willing to invest in indigenous production from
unconventional resources in the next decade (except Poland, UK)
The LNG market is targeting for Asia / Japan with the highest market
price although import capability in West European countries is in place
Interconnection of pipeline networks in Europe is poor from North –
South direction and West to East.
Alternative pipeline routes from Iran, Azerbeijan are still to be developed
(TAP, Nabucco….)
So: rely on Russian gas?
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31. Key Messages
Gas will play an increasingly important role in the energy mix for decades
Gas will support the development of a clean energy supply via power
generation and transport (GTL, LNG, CNG), provided the CO2 price is high
and the gas/oil price ratio is low.
Europe will be increasingly dependent on gas import, also NL from 2025+
Europe should further focus on diversification of gas supply
Interconnections should enable a transparent gas market for Europe
LNG import facilities, pipeline connections and UGS provide viable
alternatives for Russian gas imports, however comes at a cost
Increase of indigenous gas production in Europe can be realised with
unconventional gas developments (tight gas and shale gas), but not
reduce import levels significantly.
A reduction in gas price will only be realised when a transparent global gas
market is realised which is decoupled from the oil market.
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32. Thank you for your time and attention
Contact details
Rene Peters
rene.peters@tno.nl
Phone +31 6 51551566
@renepeters
www.tno.nl/energy
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