Download - TRANSIT IN CENTRAL EUROPE
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GIE Annual ConferenceBratislava, September 28-29, 2006
Author: Milan Sedlacek, SPP-preprava, a.s.
TRANSIT IN CENTRAL EUROPE
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Content
1. Infrastructure and volumes
2. Gas transit outlook till
2020
3. Operational aspects
4. Regulatory issues
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TRANSMED
TRANSITGAS
TAG
BRATSTVO
SOJUZ
JAMAL
NETRA
MEGAL
SEGEO
TRANSITGAS
WAG
SLOVTRANSGAZ
SEGEO
HAG
INTERCONNECTOR
TRANSGAS
TENP
TENP
EUROPIPE I
NORPIPE
MIDAL
WEDAL
ZEEPIPE
RTR
STEGAL
0 75 150 225 300 375 km
Central European transit systems- Traditional corridor Ukraine, Slovakia, Czech republic, Austria- New Yamal corridor through Belarus and Poland- NEGP and Nabucco close to construction phase
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0,00
10,00
20,00
30,00
40,00
50,00
60,00
70,00
80,00
90,00
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003
bil
.[Nm
3] Transit Capacity of SPP-Preprava
2006 year:
- capacity of the transmission system is about 90 bcm/a
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Transit Capacity – competition effectEffect of Yamal = drop of volumesQuestions – - how does this competition fit into the image of monopolies
sitting on transit lines?- who pays for the investment? Cost based regulation=decreasing volumes means increasing tariffs. Are these stable rules for shippers?- Where is the incentive to invest into new infrastructure?
- Is this a risk free business for which only low rate of return is justified?
5 years
- 18 bcm/a
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Assessing the perspectiveWhat will be the CE transit future?
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Assessing the perspectiveWhat will be the CE transit future?
Source Wood MacKenzie
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Assessing the future
Russian gas reserves – the biggest source for Europe
Source Gazexport
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Assessing the future - parameters
Main parameters:- indigenous production in Europe- consumption- trade pattern
Gas consumption:Steady growth over the period to 2020, influenced by:
- Economic growth- Usage of gas in power generation- Gas prices- Increased SoS concerns
1,70%
2,00%
2,40%
400
450
500
550
600
650
700
750
800
2000 2005 2010 2015 2020
bc
m/a
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Assessing the future – trade pattern
In all principal markets large pipeline projects are competing with LNG.Share of Russian gas is increasing.
Assumptions:- SPP-preprava, 1 line Yamal, 1 line NEGP- growth rate from 1.5 to 2.5 percent- filtered short-time turbulences Source Gazexport, BP
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Outcome – optimistic scenario
Result: Lack of capacities after 2020, some even in 2010.SPP-P is able and willing to invest to meet these requirements under the condition that commitment of shippers is in place.
Missing
SPP-preprava
-60,0
-40,0
-20,0
0,0
20,0
40,0
60,0
80,0
100,0
2000 2005 2010 2015 2020
Tra
nsm
issi
on
bcm
/a
Yamal
NEGP
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Outcome – pessimistic scenario
Result: Rising import dependency of Europe could lead to growth of volumes of Russian gas to be imported to Europe.
Missing
SPP-preprava
-40,0
-20,0
0,0
20,0
40,0
60,0
80,0
100,0
2000 2005 2010 2015 2020
Tra
nsm
issi
on
bcm
/a
Yamal
NEGP
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-OBAs-kWh-6-6 business day-electronic data interchange-daily contracts-standardised balancing and allocation rules-non discriminatory access- UIOLI
- m3- 20 degrees C- 8-8 business day- long-term contracts- customised balancing and allocation rules- „right of first refusal“
EU Non EU
Domáci
Operational issues
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What is being offered as an answer
Producers
TSOs/DSOs/SSOs
Consumers
- Tendency to over-regulate the infrastructure part- Risk of underinvestment while main problem is rather a limited number of competition on producers side.
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Conclusions- Growing import dependence
- Growing importance of Russian gas
- Some free capacities in SPP-P transmission system,
ability and willingness to invest
- Future of transit volumes depends on development of
consumption
-Introverted Europe, stable
regulatory framework is necessary
plus the need of positive
investment climate