ENTSOG GRIP South - Main Report

2.2 Trends for the

EuropeanGasMarket

Thecurrentworldwidecontext,withhighLNGdemand inAsiaanda lower offer, has madeLNG spot prices rise significantlyand increasedLNGcargoes reroutes toAsia. At European level, it hasmade shippers prefer pipe gas instead of LNG, with price consequences in countries dependent on LNG supply, which is the case in the SouthRegion. Due to the combined impact of the economic crisis Europe is currently facing and the loss of competitiveness of gas because more coal is exported from the United States, gasconsumption inEurope isdeclining. The implementationof thedecisions adopted on energy efficiency and the development of renewable energiesmay limit the use of natural gas despite its undeniable advantages. In this context, con­ sumption forecasts are in general lower than last year. Nevertheless, due to the drop in European production, request for gas imports will remain high looking toward 2030. Furthermore, the major price spreads seen on global markets confirm the importance of diversifying supply sources and in- creasing the fluidity of exchanges within the EuropeanUnion. The implementation of themarket integrationplannedby the EuropeanCommission continues, with the finalisation of two network codes (capacity allocation and congestion – bottleneck – management) and the adoption of a regulation on “guidelines for trans-European energy infrastructures”. Aware of the major financial constraints and significant economic stakes energy issues present, the European Commission is encouraging project promoters to perform cost-benefit analyses to determine which projects are themost promising in particular in the framework of the process for “projects of common interest” (PCI’s).

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ENTSOG–GRIPSouth 2013–2022 |

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