ENTSOG Southern Corridor (SC) Gas Regional Investment Plan (GRIP) 2014-2023 / Main Report

300 bcm/y

Therefore this has not yet had a sensible impact on gas prices but rather on demand since the availability of lower priced coal has had in Europe the inverse ef- fect of that in the USA, that is, a switch from natural gas to coal for power generation. This is visible in Fig- ures 4.13 and 4.14 that show the comparison of gas and coal prices in the EU and a reverse of the trend, established during the last years, for an important re- duction in coal imports after almost a decade of rela- tive stability. In fact these increased by approximately 10% from 2009 to 2012. In addition to the above factors we have had, in the few recent years, a series of price renegotiations between GAZPROM and several of its European customers which resulted (either through direct agreement or through arbitration decision) to higher or lower reduc- tions of the long-term contract prices. This contributed to the lower use of the LNG terminals, as shown in Figure 4.8 and as can also be seen in the next chapter 5 (paragraph 5.1.c), in the graphs showing the use of the LNG terminals capacity.

250

200

150

100

50

0

2007

2008

2009

2010

2011

2012

USA production of Shale gas

Figure 4.12: Production of shale gas in the USA

Source: USA Energy Information Administration

€

€/MWh

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40

35

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5

0

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2009 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 2010 2011 2012

01 02 03 04 05 06 07 08 09 10 11 12

2013

Brent crude spot (€ /bb l)

Coal CIF ARA (€ /t)

NBP Spot (€ /MWh)

Figure 4.13: Spot prices of Oil, Coal and Gas in the EU

Source: EU Quarterly Report on European Gas Markets, 2Q 2013 http://ec.europa.eu/energy/observatory/gas/gas_en.htm

100

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1990

1992

1994

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2002

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1990 = 100

Figure 4.14: Evolution of coal imports to the EU-27 (1990 = 100)

Source: Eurostat, http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Coal_consumption_statistics

Southern Corridor GRIP 2014–2023 |

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