SAEE Kolloquium The Dynamic Energy Landscape · 2018-03-21 · Gürkan Kumbaroğlu, IAEE President SAEE Kolloquium The Dynamic Energy Landscape: ... • Turkish authorities clear

– 30 March 2016, Zürich –

Gürkan Kumbaroğlu, IAEE President

SAEE Kolloquium

The Dynamic Energy Landscape: Geopolitical Implications of the Changing

Energy Economy

Source: BP Energy Outlook 2015

The Dynamic Energy Landscape

Source: US Energy Information Administration, October 2015

US Net Energy Imports


Source: US Energy Information Administration, April 2015


Source: US Energy Information

Administration, October 2015

The United States is ranked

second globally after Russia in

shale oil resources and is

ranked fourth globally after

China, Argentina and Algeria in

shale gas resources.



Top ten countries with technically recoverable shale resources

Data Source: US Energy Information Administration

Source: US Energy Information Administration EIA

Crude Oil Prices


Production freeze agreement by Russia and Saudi Arabia

Source:

Forbes, 7 March 2016



Natural Gas Prices


Source: Natural Gas Intel NGI

Recent Henry Hub Prices



Natural Gas Prices Worldwide


Volume

(bcm p.a.) Signed End

Algeria (LNG) 4.4 1988 2024

Nigeria (LNG) 1.3 1995 2021

Iran 9.6 1996 2026

Rus. Fed. (Black Sea) 16 1997 2025

Rus. Fed. (West) 4 1998 2021

Azerbaijan (Phase-I) 6.6 2001 2021

Geopolitical Implications: The Case of Turkey

Over the last 10 years gas consumption doubled in Turkey

Turkey is Gazprom's second largest sales market behind Germany

Long-term agreements unfavourable for Turkey


Turkish Stream

2020 : 63 bcm

(Dec. 2014)

2020 : 32 bcm

(Oct. 2015)

Offshore : 910 km

TR onshore: 180 km


• Turkish authorities clear permits for only one section of the TS pipeline project,

negotiating on discount for existing long-term contract deliveries. (June 22, 2015)

• Negotiations between Russia and Turkey on the Turkish Stream pipeline project have

been suspended, following disagreement over pricing and permit allocations. (July 30,

2015)

• Political uncertainty in Turkey and elections slow down communication

• Russia sends special forces into Syria (October 5, 2015)

• TS capacity reduced to 32 bcm (October 6, 2015)

• Turkey takes Russia to arbitration over gas price dispute. (October 27, 2015)

• Downing of Russian airplane (24 November 2015)

• Talks suspended (3 December 2015)

Turkish Stream: Challenges to Overcome


Capacity: 55 bcm

Does it conform to EU’s Third Energy Package ?

Nord Stream II


• President of the European Council, Donald Tusk: Nord Stream II is not in the

EU’s interests

• Russian President Vladimir Putin orders withdrawal of Russian troops from

Syria (14 March 2016)

• Eight EU governments sign letter objecting to Nord Stream II (16 March 2016)

• Gazprom Board Member Aksyutin: The timing of the project will be determined

after the normalization of Russian-Turkish relations and signing of an

intergovernmental agreement (18 March 2016)

Revitalization of Turkish Stream ?


SCP : 691 km

TANAP : 1841 km

TAP

onshore : 765 km

offshore : 105 km

The SCP / TANAP / TAP Project

TANAP

2018: 16 bcm

2023: 23bcm

2026: 31bcm


Iran after Disembargo

Comeback of NABUCCO ?


Prospects for supply from

Iraq and Syria ?


Iraq is second-leading contributor to global liquids supply growth in 2015



Short-term Energy Outlook Feb 2016


Source: Oil&Gas 360

OPEC report: Iraq has more than

150 billion barrels of proved

reserves and more than 300 billion

barrels of unproved reserves

World’s 2nd largest oil

country after Saudi Arabia

(5th on proven reserve ranking)


Source: Middle East Research Institute MERI

50 billion barrels of proved

reserves and 80 billion

barrels of unproved reserves

8-10 trillion cubic meters of

natural gas reserves

World’s 8th largest oil and

gas reserves

Northern Iraq

EUROPEAN COMMISSION JOINT STATEMENT

Malta, 11 July 2014

Security of gas supply:

the role of gas developments in the

Mediterranean region

The European Commission

recommended developing a

Mediterranean gas hub as part of

efforts to improve the EU's energy

security by diversifying gas routes and

suppliers.

Mediterranean gas - Another corridor?

122 tcf trr acc to USGS


If sufficient volumes are attained, the pipeline option offers economies of

scale and lower cost

Turkey offers the only onshore pipeline route option for Med gas

Challenge: regional conflicts, no stability in the Middle East

Mediterranean gas


Albania, Bosnia

Herzegovina, Kosovo,

Macedonia, Montenegro,

Serbia

Non-EU Eastern Europe

high-cost countries

Southeastern Europe

Southern Corridor Needed


CESEC Central Eastern and South Eastern Europe Gas

Connectivity – A European Commission initiative

Aim: to build a single internal energy market, in which energy flows

freely and in which prices are affordable, without any fragmentation

of Europe.

July 10, 2015 – Thirteen countries from Central Eastern Europe (CEE) and

Southеastern Europe (SEE) sign a MoU on creating an integrated gas market


CESEC priority projects:

Trans-Adriatic Pipeline

Interconnector Greece-Bulgaria

Interconnector Bulgaria-Serbia

Bulgaria & Romania System Reinforcement

LNG terminal in Croatia and evacuation system towards Hungary

On-going discussions between Ministries, National Regulatory Authorities

and TSOs in Bulgaria and Greece with the stated intention to sign an

interconnection agreement with the objective of enabling reverse flows from

Greece to Bulgaria.


A Gas Hub at the Turkish-Greek Border


Turkish-Greek Cooperation

• The Greek/Turkish border emerges as a natural gas hub location

where

diversification and security of supply is ensured

physical trading takes place

gas-to-gas competition takes place

a reference price of gas gets established

• Energy policy decisions should be depolitized and driven by energy

economics


Algeria – the world’s seventh largest gas producer: pipelines to

Spain and Italy underutilized

Western Europe: Increased supply from North Africa ?

Political

concern,

terrorist attack

on gas facilities


Source: BP Statistical Review of World Energy 2015

What’s coming up ?


Source: Federal Energy Regulatory Commission FERC

Existing North American LNG Import/Export Terminals



Approved North American LNG Import/Export Terminals



Proposed North American LNG Export Terminals


9.43

Bcfd

17.69

Bcfd

Existing capacity : 4.16 Bcfd

Under construction: 0.82 Bcfd (2017)

3.83 Bcfd (2018)

1.80 Bcfd (2019)


0

200000

400000

600000

800000

1000000

1200000

197

3

197

5

197

7

197

9

198

1

198

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1

200

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7

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9

201

1

201

3

201

5

US Natural Gas Pipeline Exports (MMcf)

Canada Mexico

0

50

100

150

200

250

300

350

400

450

500

US LNG Exports by Truck (MMcf)

Canada Mexico

0

10000

20000

30000

40000

50000

60000

70000

80000

197

3

197

5

197

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US LNG Exports by Vessel (MMcf)

Japan Taiwan

0

2000

4000

6000

8000

10000

12000

14000

2007 2008 2009 2010 2011 2012 2013 2014 2015

US LNG Re-Exports (MMcf)

Brazil Chile China Egypt

India Japan Mexico Portugal

Russia South Korea Spain Turkey

UK

Data Source: US Energy Information Administration EIA

(from a plant in Kenai, Alaska)


37

Spain and Portugal account for about 45% of all LNG imports into Europe

LNGPipeline links to RoE

underdeveloped


Aim: developing a natural gas hub in the Iberian Peninsula

In May 2013, Iberian Gas Hub started to provide brokering services in

the OTC natural gas and LNG markets in Spain and Portugal.

Project officially launched in March 2011 with the creation of the

Sociedad Promotora Bilbao Gas Hub, S.L (now Sociedad Bilbao Gas

Hub, S.A.).

Purpose: carry out activities aimed at the promotion of market, logistic

and financial services required to facilitate natural gas and LNG

transactions.


US shale revolution: shifting geopolitics of energy in Europe and Asia

Increased shale gas production in the US affects geopolitics

worldwide

Iberian Peninsula: a prospective hub for shale gas from US

Growing importance of


East and West ends of Europe, Turkey and Iberia emerge as strategically

important locations as European gas hubs


IAEE Headquarters28790 Chagrin Blvd., Suite 350Cleveland, OH 44122 USA

Tel 1-216-464-5365Fax [email protected]

For More Information

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SAEE Kolloquium The Dynamic Energy Landscape · 2018-03-21 · Gürkan Kumbaroğlu, IAEE President SAEE Kolloquium The Dynamic Energy Landscape: ... • Turkish authorities clear