Supply Prospects and Network Integration in the European Natural Gas Sector

Abstract

At least for the next 10–15 years, natural gas will be the fastest‐growing energy form in Europe, with a higher rate of growth in consumption (from a lower base) in central Europe than in western Europe. Although most of the prospective demand until 2010 is covered by signed import contracts and indigenous production, important additional gas supply capacity still has to be developed out of a plenitude of reserves within and (in the long run primarily) outside western and central Europe. The real problem is how to mobilise the reserves economically and direct them towards the European market, in competition with other markets.Europe has a sophisticated transmission system whose development has gone hand‐in‐hand with long‐term import agreements. Among the missing links is the Interconnector, which, at the end of 1998, is due to integrate the UK and Ireland into mainland Europe. This is expected to enhance security of supply in both areas, to balance prices and maybe also to foster ideas of liberalisation.Overall, the European gas industry is in an excellent position to develop the supply of gas in an environmentally benign way. The future belongs all the more to natural gas, the fewer the mistakes that are made when it comes to matters of legal frameworks and taxation.