The question being raised in Europe is many of the new gas pipelines being planned by both Moscow and Brussels may not be required. Since 2008, overall demand for power has contracted by 1.2 % per year, reports European Commission's “Quarterly Report on European Electricity Markets." Demand for gas is likely to fall further due to increased usage of coal and renewables for power generation. Europe has still not recovered from its economic crisis. The arrival of LNG from the United States and domestic production of shale gas.

1. A look at new gas
pipeline plans
By Nicholas Newman
Nicnewmanoxford.com
May 2013
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Are Russia and the EU planning a
“zombie” pipeline network?

2. Pipeline Projects Project leader State of Progress Capacity per year
in billion cubic
meters
Estimated date
of Completion
Nordstream 1&2 Gazprom Completed 27.5 2012
Nordstream 3&4 Gazprom Awaiting Regulatory Approval 27.5 Date unknown
Nabucco EU Awaiting Regulatory Approval 23 Date unknown
Sudstream Gazprom Awaiting completion of Feasibility Study.
Construction may start in 2014.
63 Date unknown
Yamal-Europe 2 Gazprom Awaiting completion of Feasibility Study.
Memorandum of understanding signed
between EuRoPol GAZ and GAZPROM, but
Polish PM Tusk has not yet given approval for it
to be built through Polish territory..
15 2019
Trans Adriatic Pipeline EU Awaiting full political go-ahead 20 Date unknown
Polish- Lithuania EU Awaiting completion of Feasibility Study. 2 2018
North South Corridor
(Poland Slovakia
section)
EU Awaiting completion of Feasibility Study. 7.5 Date unknown
Source: various sources including Financial Times, Bloomberg, RT.com
Some current gas pipeline plans
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3. European Pipeline Map
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4. Gas demand is expected to increase from 438 mtoe in 2005
to 625 mtoe in 2030, which is an increase of 43%, estimates
Eurogas (2006)
The IEA’s ‘World Energy Outlook 2012 ’ forecasts that,
because of declining EU gas production, Europe will need
to increase its imports of gas from 302 BCM in 2011 to 554
BCM by 2035
Much of this increase in demand is forecast to come from
Europe’s power generation sector, from 123 mtoe in 2005
to 239 mtoe in 2030
The case for more gas pipelines
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5. Improved energy security
Improved integration of Europe’s gas market
Increased demand and new sources of supply
Reduced transport costs
Replacing life expired pipelines
Reasons for needed new capacity
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6. Since 2008, overall demand for power has contracted
by 1.2 % per year, reports European Commission's
“Quarterly Report on European Electricity Markets
Demand for gas is likely to fall further due to
increased usage of coal and renewables for power
generation
Europe has still not recovered from its economic crisis
The arrival of LNG from the United States and
domestic production of shale gas.
The case against
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7. In 2012 'Gazprom' exported 203.22 bcm of Russian gas
to Europe. If all the proposed Russian pipeline
projects are completed capacity is expected to reach
380bcm, reports Rovshan Ibrahimov, Head of
International Relations at Qafqaz University,
Azerbaijan,(2013)
Gazprom is facing a gap in demand
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8. Delays in starting construction are likely because of
continued uncertainty about future growth in
demand.
Increased difficulties of pipeline consortiums to raise
money from Europe’s financial markets.
Doubts about the actual need for many of these
pipelines.
The question of delays
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9. Many of the proposed pipelines are unlikely to justify
their business case.
Reduced demand means there is already surplus
capacity.
Europe should focus on investing in pipelines that are
part of the TENS programme to fill in gaps in the
existing network , so as to ease of switching of gas
across Europe.
Thank you!
Conclusion
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