Current situation and outlooks

Demand headed in the right direction

The European Union consumed around 510 billion m3 (Gm3) of natural gas in 2010, a 7% rise that returns consumption levels to levels nearly as high as before the financial crisis. Imports covered 65% of demand, 50% of which in gaseous form (up 2%) and 15% in LNG form (up 25%). Significant extractions from underground storage facilities completed the balance between supply and demand. The main European producing countries are the UK and the Netherlands.
The main external countries supplying Europe are Russia, Norway, Algeria and Qatar.
By 2035, natural gas demand in Europe will exceed 630 Gm3, according to the International Energy Agency: 530 Gm3 will need to be imported, compared with 331 Gm3 in 2010. This growth is mainly driven by natural gas requirements in electricity production. Europe is preparing for this by expanding its gas infrastructures, with network investments put at €150 billion by 2030.

Changing consumption and supply of gas to the EU by 2015

The impact of Fukushima

The nuclear disaster triggered by the tsunami on 11 March 2011 in Japan reignited debate about the safety of nuclear power stations and the diversification of energy supply sources.
Germany has decided to discontinue nuclear power production by 2022; the oldest reactors were decommissioned in 2011 (7 GW). The European Commission has requested stress tests for all nuclear power stations.
This new context will foster additional demand for gas as a replacement for nuclear energy and in synergy with the growth in renewable energies, which will support investments in new gas infrastructures.

Prices on the rise

The prices of long-term contracts are mainly indexed to changes in the price of oil. Short-term spot prices rose sharply in 2010 due to the increase in demand, but on the whole remained below the prices of long-term contracts. This enabled market players to choose between different gas supply sources.

Dynamic marketplaces

These market conditions prompted strong growth in the volumes traded on short-term marketplaces in Europe. These marketplaces offer a common and public benchmark price based on players' expectations.
The increase in liquidity on the wholesale markets stimulated competition between gas suppliers and there has been a rise in the market shares of new players, both in the supply of gas to end customers and in trading transactions.