LNG, gas supply from Azerbaijan to ensure growth of export to Europe

LNG, gas supply from Azerbaijan to ensure growth of export to Europe

The supply of liquefied natural gas (LNG) and gas from Azerbaijan will ensure the growth of this fuel’s export to Europe in coming years, according to the research conducted jointly by the Energy Institute of the National Research University Higher School of Economics of Russia and Energy Research Institute of the Russian Academy of Sciences.

The natural gas consumption in Europe grew rapidly in the previous decade (except for the crisis year of 2009) and reached its peak in 2010 (597.9 billion cubic meters), then dropped by 23 percent in only four years, according to the research.

Nevertheless, the authors of the research expect an increase in demand for natural gas in Europe in coming years.

“The base scenario envisages the restoration of gas consumption in Europe, starting from 2015 after the long and sharp decline of the previous years,” the research says. “According to the forecast, the gas demand will increase by 14 percent in 2014-2035. As a result, the demand will return to the level of 2012.”

“At the same time, own production in Europe will continue declining although at a slower pace than before,” the experts of the Russian institutions said. “Its decline will hit 40 billion cubic meters in 2015-2025 as opposed to 90 billion cubic meters in the previous ten years.”

“It will be necessary to increase imports following the restoration of demand and the decrease in production,” the experts said. “LNG supplies and gas from Azerbaijan will mainly increase the exports. Russian supplies will be gradually restored up to the level of 2013.”

At the same time, the study said that improvement of energy efficiency has become one of the key priorities of the European energy policy, which affects consumption of all energy resources, including gas, and the general trend of reducing the use of fossil fuels in favor of renewable energy sources (RES) has been established in a number of policy documents of the European Commission.

As a result, decline in total energy consumption in Europe’s industry and decline in gas predetermine the further total reduction of gas consumption in the region. However, during the post-crisis economic recovery and industrial growth, a temporary increase in gas consumption up to 5-7 percent is possible, experts said.

“However, the long-term trend is reduction of gas consumption in the industry,” the study said.


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