European market
The natural gas market in Europe
With more than 50,000 km of gas pipelines, Europe's natural gas transmission system is one of the most fine-meshed in the world. Over the next few years, the gas network will be expanded with hundreds of kilometres of additional natural gas pipelines, both across land and undersea. Also, an increasing number of major European ports is being equipped with natural gas storage facilities (LNG terminals). But where does this gas come from? How long will reserves last and what is the evolution in consumption? Below you will find a number of frequently asked questions.
- 1. What is natural gas?
- 2. Where are the world's main reserves?
- 3. What are the world's natural gas reserves for the future?
- 4. How much natural gas is consumed worldwide?
- 5. What is the European natural gas network?
- 6. What is LNG (liquefied natural gas)?
- 7. How is the gas sector organized in Europe?
- 8. Where does the natural gas consumed in the Netherlands come from?
1. What is natural gas?
Natural gas is a primary energy source present in nature and it can be used without additional processing. It is odourless, highly flammable and non-toxic. It consists of methane (80 to 99%) and light hydrocarbons such as ethane, propane and butane. For example, the natural gas from the Slochteren facility in Groningen, Holland, consists of 81% of methane, 3.6% of higher gaseous hydrocarbons and 0.4% of H2S (hydrogen sulphide). Nitrogen and carbon dioxide account for the remaining 15%.
Top2. Where are the world's main reserves?
The world's natural gas reserves are fairly well distributed among the continents. The world's largest natural gas fields are located in western Siberia with an estimated reserve of 48,000 billion cubic metres. The two largest fields alone account for 7,000 billion cubic metres of exploitable natural gas reserves. Other major gas producers include Iran, Venezuela, Algeria and Qatar. The Netherlands (Groningen) and Norway (North Sea gas) are Western Europe's largest producers.
Top3. What are the world's natural gas reserves for the future?
The world's proven natural gas reserves were an estimated 180,000 billion cubic meters in 2008 a volume sufficient enough to supply the world population with natural gas (at the current rate of consumption) for approximately 60 years. If we add exploitable resources that cannot be currently exploited for financial or technological reasons (gas hydrates, for instance), there is enough to last 170 years.
Top4. How much natural gas is consumed worldwide?
In 2004, global consumption of natural gas was 2,689 billion cubic meters. That same year the European market consumed 458 billion cubic meters. The United Kingdom and Germany accounted for the lion's share of this consumption with nearly 100 billion cubic meters each.
Top5. What is the European natural gas network?
The European interconnected natural gas network stretches from the North Sea and the Baltic to the Mediterranean, and from the Atlantic to Eastern Europe. It consists of interconnected networks owned by several European gas companies. The infrastructure is currently being expanded with a connection between Russia and Germany (under the Baltic). New pipelines will also connect Norway with the UK and the continent.
Top6. What is LNG (liquefied natural gas)?
When its temperature is lowered to -161°C, natural gas liquefies taking up 1/600th the volume it does in its gaseous state. Liquefied natural gas (LNG) makes it possible to transport very large quantities of energy over long distances in specially designed cargo ships known as tankers. A single cargo carried by a high-capacity tanker (130,000 cubic meters) is enough to supply a town of 20,000 for one year. When it reaches its port of destination, the LNG is regasified in special terminals and injected into the natural gas network. Today, LNG accounts for nearly one quarter of the international natural gas trade.
Top7. How is the gas sector organized in Europe?
Thanks to the application of European guidelines there is a reasonable degree of competition on the Dutch gas market. Several providers have a market presence. GasTerra, the commercial division of former state monopoly Gasunie, is still a major player, even though all network activities have been transferred to natural gas infrastructure company Gasunie. This company is owned 100% by the Dutch government.
- The transmission system operator (high-pressure gas pipelines) www.gasunie.nl
- Operators of distributions networks transmit natural gas to end customers and operate local distribution networks.
- Suppliers of natural gas. Since the market was liberalized, most customers are now free to choose their supplier. Some suppliers offer natural gas to all categories of customer while others focus on a particular segment. Distrigas mainly focusses large industrial consumers.
The national energy regulators oversee the correct operation of the liberalized market.
Top8. Where does the natural gas consumed in the Netherlands come from?
The lion's share of natural gas in the Netherlands originates from the Groningen field and the smaller natural gas fields on Dutch territory (both on land and beneath the sea floor). Apart from NAM/gasTerra, Total, Wintershall and several other companies are active on the Dutch market. The Netherlands also import natural gas from Norway and Russia and a smaller portion from Germany and Denmark. If there's room on the interconnector, gas is sometimes imported from the UK. However, due to the UK's declining production, such occasions are becoming increasingly rare.
Top
International information
- Statistical information about its member states is published by the United Nations Economic Commission for Europe (UNECE)
- Comparative statistics on EU Member States are compiled by the EU's statistics office EUROSTAT
- Information about the international natural gas market is published by, amongst others, the International Energy Agency
