Gas for Europe

Europe needs gas

: EU Domestic Gas Production (click to enlarge)

Natural gas is an environmentally friendly fossil fuel with the lowest emission values and its importance in the energy mix is growing.

Europe needs more natural gas every year. Annual increase of demand is about 2%, and consumption in 2015 will be about one-third higher than in 2005. With the domestic production declining, the European Union will be importing 75% of its natural gas in 2015, compared to 57% in 2005 (Data source: IEA reports).

Russia is an important gas supply partner for Europe

: Russia - the world's greatest gas reserves (click to enlarge)

Europe’s gas demand will have to be met from Russia for a number of reasons:

Russia is the world’s largest gas producer and the nearest to Europe
Russia has been a reliable supplier to Europe for over 40 years
Russian gas reserves are large enough to supply Europe for decades
Delivery contracts have been signed between European and Russian companies up to 2035
In comparison to other supply alternatives, natural gas from Russia is competitive

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

Substantial part of gas supplies is already contracted

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

A substantial part of gas which is to be transported via Nord Stream is already contracted and is awaited by the consumers in Europe 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 target of producers and consumers

Russia is as much dependent on gas exports as Europe on its imports. 75% of Russian gas exports are delivered to the EU25. In Russia, the oil & gas industry is the pillar of the economy, and gas exports are essential for the state budget. They account for 20% of the overall industrial production and 40% of tax revenues. Gazprom alone contributes 25% to the state budget.

Large natural gas supply source 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.

This deposit is located in the Krasnoselkupsky District, Yamal-Nenets Autonomous Area, Tyumen Region. The field has estimated reserves of over 1 trillion m³ of gas including more than 700 billion m³ of proven reserves. After the planned capacity is achieved, the deposit will produce about 25 billion m³ of gas annually. The estimated total investment in the Yuzhno-Russkoye deposit development is € 1 billion. Drilling work at the Yuzhno-Russkoye gas field is in progress.

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