European pipelines | analysis
A number of major European gas pipeline projects emerged over the past decade. But with the continent in recession, Nicholas Newman considers the outlook for these schemes
Where next for Europe’s gas mega-pipelines
Over the past decade – and before the 2008 fi nancial crisis – consortia comprised of energy companies, investment funds and government agencies developed ambitious proposals to construct major new pipelines across Europe. With Europe now in recession, questions over the fi nancial viability, operational sense and even the need for such a large expansion of capacity are emerging. Russia’s Gazprom and the European Commission
(EC) were among the principle instigators in these schemes. Today, Gazprom supplies one-quarter of Western Europe’s gas requirements. It has proposed at least three mega pipeline projects to connect its Arctic gas fi elds in Siberia’s Yamal Peninsular with Western Europe in order to provide suffi cient capacity to meet Europe’s future needs, maintain market share and to, perhaps, divert gas transmission to Western Europe away from the Ukrainian pipeline network. Meanwhile, the EC has produced a rival plan for a mega pipeline to link Central Europe, via Turkey, to the gas fi elds in Central Asia and the Gulf Region. It also plans smaller “fi ll-in” projects to make up for gaps in the existing pan-European pipeline network in order to create a single European gas market. These pipeline schemes shared the one major
assumption that European demand for gas would rise. In
2006, for instance, Eurogas predicted demand would rise 43% by 2030, from 438 mtoe (million tonnes of oil equivalent) in 2005 to 625 mtoe in 2030(1)
. More recently,
the IEA World Energy Outlook 2012 forecast that, because of declining output from European gas fi elds, Europe would need to increase imports of gas from 302 bcm (billion cubic metres) in 2011 to 554 bcm by 2035(2)
Much of this increase in demand is expected to derive from expanding Europe’s power generation sector. Unfortunately for Europe’s pipeline investors,
however, the demand for electricity in Europe has contracted by 1.2% per year since 2008, according to the EC’s Quarterly Report on European Electricity Mar- kets(3)
. This drop in demand has been especially marked
in energy intensive industries such as steel, pharma- ceuticals, plastics, fertilisers, construction, cement and chemicals, which have been burdened by both a contraction in home demand as well as price un-com- petitiveness with American counterparts benefi ting from the shale energy revolution. Given the extent of Europe’s crisis and America’s
improved competitiveness, this could mean a perma- nent loss in capacity. In many European countries, including France, Germany, the Netherlands and Spain, gas power plants are failing to break even. In part, this is due to the success of Europe’s renewables policy.
May 2013 | PIPELINE COATING 17 .
PHOTO: NORD STREAM
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48