Europe Needs Gas

Natural gas is an environmentally friendly fossil fuel with the lowest emission values, and its importance in the energy mix is growing. Gas imports into the European Union, 314 billion cubic metres in 2005, are projected to grow by 195 billion to 509 billion cubic metres until 2025.  By connecting the world’s largest gas reserves to the European gas pipeline network, Nord Stream will meet about 25 per cent of that additional requirement. At that date, Nord Stream’s share of total natural gas imports into the EU will be at most eleven per cent.

Russia is an important gas supply partner for Europe

Europe’s demand for gas will have to be met by Russia for a number of reasons: Russia is the world’s largest gas producer and the closest to Europe

(Data Source: BP-Statistical Review of World Energy 2007)

Substantial amounts of gas supplies have already been contracted

Nord Stream will deliver gas produced and supplied by OAO Gazprom.

A substantial amount of gas to be transported via Nord Stream has already been contracted and will be delivered to European consumers starting in 2011.

Gazprom has signed an agreement with the following European companies:

• Dong Energy, Denmark – 1 billion cubic metres per year
• E.ON Ruhrgas, Germany – 4 billion cubic metres per year
• Gaz De France, France – 2.5 billion cubic metres per year
• Gazprom Marketing & Trading, UK – 4 billion cubic metres per year
• WINGAS, Germany – 9 billion cubic metres per year

Secure gas supply is a mutual goal of producers and consumers

Russia is as dependent on gas exports as Europe is on its imports. Seventy-five percent of Russian gas exports are delivered to the EU-27. In Russia, the oil and gas industry is the pillar of the economy, and gas exports are essential for the federal budget. They account for 20% of the overall industrial production and 40% of tax revenues. Gazprom alone contributes 25% to the federal budget.

Large source of natural gas for Nord Stream

Most of the natural gas to be supplied by Gazprom via Nord Stream will come from the Yuzhno-Russkoye oil and gas field — one of the largest fields in the world.

These deposits are located in the Krasnoselkupsky District, Yamal-Nenets Autonomous Area, Tyumen Region. The field has estimated reserves of over 1 trillion cubic metres of gas, including more than 700 billion cubic metres of proven reserves. After the planned capacity has been reached, the field will yield roughly 25 billion cubic metres of gas per year. The estimated total investment in the Yuzhno-Russkoye field development is 1 billion Euros. Drilling work in the Yuzhno-Russkoye gas field is in progress.

Nord Stream will later be supplied with additional gas from fields on the Yamal Peninsula, in Ob-Taz bay and Shtokmanovskoye.