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The European gas market: the life in the epoch of the Third Energy Package

The European gas market: the life in the epoch of the Third Energy Package

The outcomes of natural gas policies of the European Union are contradictory. Gas consumption has dramatically plunged compared to its peak parameters some five to ten years ago. The declared political goals, e.g. diversification or, speaking plainly, reduction of the EU’s dependence on Russian gas, have not been achieved. On the contrary, there is a stable tendency of advance in the share of Russian gas in the European energy balance.

Introduction of norms, mechanisms of the EU single gas market in particular, has not been completed following many years of such attempts.

The situation is flavored by Brexit, because the British market system was taken as model to be followed by the entire European Union.

The new report analyses the condition of the EU gas market, considers regulation practices and new initiatives planned for introduction, reviews infrastructure projects, and assesses prospects of the European gas market in the medium term.

The report elaborates on the following issues:

  • The current situation in the EU gas market

    • The demand dynamics, structure of consumption
    • Decline in domestic production, its consequences
    • Price conjuncture, approaches to contracts
  • Regulation of the European gas market – first outcomes of the Third Energy Package implementation.

    • The basic model of the gas market in the EU, its introduction in particular countries
    • Withdrawal of assets from large energy companies, implications
    • Main risks of gas business operation during peak demand
    • Latest initiatives by Brussels in the sphere of gas market regulation
  • Prospects of the EU gas infrastructure development

    • Nord Stream-2, transit through Ukraine
    • Southern Corridor – prospects of the TANAP and TAP projects
    • New LNG receiving capacities
    • Plans on developing the EU single gas market infrastructure
  • Medium-term forecast of developments

    • Growth in demand for gas imports
    • Trends in the regulation sphere – competition or centralization?
    • Prospects of pricing: the future ratio of spot trade and long-term contracts

Contents of the report:

1.1. Domestic production – the epoch of decline 4
1.2. Dynamics of demand, consumption structure. Is Renaissance possible? 10
1.3. Deficit of domestic production, sources of imports 18
1.4. Price conjuncture, long-term contracts 24
2.1. Place of natural gas in EU energy balance 28
2.2. Preliminary results of Third Energy Package implementation: single EU market not created 35
2.3. Energy Union – EC monopolizes external energy policy 40
3.1. Projects of common interest 44
3.2. Southern Gas Corridor 50
3.3. Development of infrastructure for Russian gas imports 53
Date of release: November 29, 2016

If you are interested to obtain please contact » Elena Kim

Other issues:
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Analytical series “The Fuel and Energy Complex of Russia”:

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Russian Energy and West One Year after Ukraine Conflict Began: Are There Connections Still?
Green Agenda in Russia during Bitter Conflict with West
After February 2022 the agenda was radically rewritten. Western companies began leaving Russia en masse, economic relations with the West were drastically reduced, and the Russian economy began to be pushed violently from the global economic space, hemmed in by sweeping sanctions. All that was, to put it mildly, not the best background for talking about ESG. Especially because tasks of survival and stability under unprecedented pressure became the priority in the economy. In late 2022, however, attempts to reanimate the ESG agenda already became obvious. The message is put across insistently that it is important to Russia regardless of the foreign policy situation. While earlier the “green pivot” was seen as an opportunity to attract Western investors and their technological solutions to Russia, now Keynesian reliance on domestic manufacture is discussed.
Oil and Gas Sector Regulation in 2022 and Prospects for 2023
Gazprom at the Forefront of Economic and Political Battles with Europe
Gazprom is being actively thrown out of the market. Its annual supplies to Europe have shrunk from the previous 150 billion to 65 billion cubic metres of gas. European officials assure that they have already learnt how to live without Russian gas, so they will bring its purchases down to but nominal values in 2023. Their main hope is liquefied natural gas. Today the EU must make a crucial decision: whether it has passed the point of no return in gas business with Russia and whether it is certain that its economy will endure without supplies of Russian pipeline gas. Or, on the contrary, Europe will realise after all that the gas balance will not be achieved and the payment for so headlong a rush for LNG will be disproportionate. Assessment of the potential volume of LNG that will appear on the market before the end of the current decade will be the most important factor for making the decision.

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

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