This is pretty interesting, despite an unprecedented recession, the demand for natural gas is still humming along quite nicely in Europe. Gas is relatively cheap in Europe, and that seems to be the main explanation. It’s also much cleaner than other traditional sources so we expect the demand for it to continue it’s upward trajectory..
European gas demand increases by 2.1% in 2008
Doris Leblond
OGJ Correspondent
PARIS, Mar. 17 — Preliminary figures and estimates brought out by the European Union of the Natural Gas Industry (Eurogas) indicate that total natural gas consumption in EU27 increased by 2.1% in 2008 over 2007 from 506.4 billion cu m (bcm) to 517 bcm. The total number of gas customers connected to the EU27 gas grid rose 1% to 112.5 million customers.
The largest gas consumers by far were in the UK where consumption rose to 101.8 bcm from 97.6 bcm in 2007; in Germany, where consumption fell to 85.1 bcm from 86 bcm in 2007; and in Italy, where consumption fell to 82.8 bcm from 82.9 bcm in 2007.
On a lower scale, consumption increased in France to 47.4 bcm from 45.8 bcm in 2007; in the Netherlands, up from 39.8 bcm to 41.4 bcm; Turkey to 36.1 bcm from 35.9 bcm; and in Switzerland to 3.3 bcm from 3.1 bcm.
Although natural gas markets vary significantly from one EU country to another, Eurogas believes some general trends may explain the overall increase. The main one is that the weather was mild in 2007 but rather cold in 2008 which, in addition, was a leap year of 366 days.
Overall the residential sector registered stable consumption resulting mainly from a trade-off between generally colder weather and energy savings. So the increase in gas consumption could be attributed to high demand in the power sector due to favorable gas prices compared with oil and coal. However, in all EU countries, there was a major slowdown in industrial demand in the last quarter due to the economic crisis.
Indigenous gas production increased 1.8% to 202 bcm over the period, pulled along by the Netherlands’ 10.9% increase in production and Denmark’s 9.4% hike, compensating for the downward trend in most other EU producing countries.
Indigenous production, nonetheless, covers the highest percentage of the gas supplied in the EU, covering 39% of the total net supplies in 2008. The main external sources are Russia 25%, Norway 18%, and Algeria 10%. Some 60% comes from fields in Western Europe.