ENTSOG GRIP South - Main Report

2,500 TWh/y

2,000

1,500

1,500

500

0

2013

2017

2022

2013

2017

2022

2013

2017

2022

Russia

Norway

Algeria

Figure 4.6: Supply potential forecasts to the EU-27 for themajor pipeline suppliers to the South Region in TWh /year

The supply potential of Russia, however, is set to steadily increase over the next ten years. The development of gas Corridors along Europe opens up the path to gas flows that could be made available to the more southern regions of the South Re- gion, i.e. Portugal andSpain, diversifying their pipeline imports. Thiswould increase the liquidity in the gasmarket opening possibilities of arbitrage between the differ- ent European gas sources. Theproximityand the level of reservesof Algeriamayencourage investment inpipe- lines from Algeria with the aim of increasing diversification to Europe. Long term supply visibility fromAlgeriawouldbe promotedby partners’ agreements aswell as it hasbeen thecaseof gaswithNorwaywhich, thanks toEEC free tradeagreements, shows long term stability.

4.3 TheLNGMarket in the SouthRegion

The level of LNG supplies that will reach the European market in the future will depend onmany factors, including: \\ The potential for significantly increased global liquefaction capacity going forward, for example the facilities under construction in Australia, proposals to export US gas as LNG and possible new LNG from Africa (Mozambique) and Russia. \\ Higher global LNGdemand, particularly in the Far East. \\ Inter-regional price variations. In some instances traded LNG would flow towards higher pricedmarkets. \\ In the short term, uncertainty regarding LNGdemand in Japandue to the level of nuclear generation returning. It should be highlighted that one of themajor effects in the evolution of LNG sup- plies will be the changing US supply-demand position. Only a few years ago, with domestic gas production in decline, the US was predicted to be a significant im­ porter of LNG in the future. Now, with developments in hydraulic fracturing and

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ENTSOG–GRIPSouth 2013–2022