Commodity market report
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33 Pages

Europe falls in love with cheap Russian gas: Europe gas markets long-term outlook H2 2016

Europe falls in love with cheap Russian gas: Europe gas markets long-term outlook H2 2016

Report summary

Market fundamentals are set to tighten as coal retirals support an additional 19 bcm of gas demand by 2020. Indigenous supply is set to decline over the same period, more so than our previous update, as we incorporate further restrictions on Groningen and disruptions to the Danish Tyra field. Pipeline imports from Norway, Algeria and Russia have all increased in 2016 and future pipeline imports will remain resilient. The stage is already set for a competition between low cost Russian gas and cash expensive US LNG. US LNG will be at the margin in Europe, forcing the shut-in of some US LNG export capacity.

What's included?

This report includes 2 file(s)

  • Europe falls in love with cheap Russian gas: Europe gas markets long-term outlook H2 2016 PDF - 990.30 KB 33 Pages, 3 Tables, 28 Figures
  • Europe gas markets long-term outlook - H2 2016.xls XLS - 1.19 MB


Volatility in oil markets and the growth of unconventional gas supply have created a high degree of uncertainty about future gas demand and the direction of gas prices.

This Gas Markets Long Term Outlook report forecasts future pricing, based on deep analysis of gas supply and demand fundamentals. Additionally, it addresses complex questions on gas flows, identifies future opportunities and informs fuel purchasing strategies.

Participants and investors can use this long term outlook report to understand gas markets and assess the impact of global gas dynamics and key market drivers.

Wood Mackenzie provides detailed supply, demand and price forecasts based on our integrated upstream, power, coal and LNG research. Our regional gas experts are based in the markets they analyse, providing comprehensive analyses of regional and global gas markets.

If you want to understand complex gas market dynamics and plan for the future, Wood Mackenzie is the premier resource to help you gain a clear, competitive advantage.

  • Executive summary
    • Market fundamentals in Europe are tightening …
    • …but pipeline imports in Europe are resilient
    • European spot prices will be set by US Gulf Coast LNG FOB in the medium term
  • Economic outlook
  • Policy and regulation
    • Dimension 1: Energy security, solidarity and trust
      • Main projects and initiatives:
      • Security of supply
      • Dimension 2: A fully integrated internal energy market
      • Main projects and initiatives:
      • Internal market
      • Competition
      • Anti-trust enforcement
    • Dimension 3. Decarbonising the economy
      • Main projects and initiatives:
      • The Paris Agreement, an upside risk for the EU climate change targets
      • Clean Energy for all Europeans
      • Renewable energy targets
      • Strengthening the EU emissions market
      • Dimension 4. Energy efficiency
      • Main projects and initiatives:
      • Energy efficiency targets
    • Dimension 5. Research, Innovation and Competitiveness
      • Main projects and initiatives
  • Demand
    • Power sector
    • Non-power sectors
      • Industrial sector
      • Residential/commercial sector
      • Other sectors
      • Road transport
      • LNG marine bunker sector
  • Supply
    • Groningen production restrictions continue to constrain European mid-term supply with further pressure from UK declines and Denmark re-development
    • Longer term European unconventional prospects disappoint and decline accelerates
  • Infrastructure
    • LNG import infrastructure
    • Existing infrastructure
    • Projects under construction
    • Pre-FID projects
    • Other Services
    • Southern route
    • Nord Stream expansion
    • EC's decision on OPAL: increasing the utilisation of Nord Stream 1
    • Southern Corridor
  • Contracts
    • LNG
      • US LNG deals
      • Put option deals
      • Swap agreements
      • Other LNG deals
    • Piped
  • Supply-demand balances
    • Supply-demand balances
    • Flow dynamics – Russia
    • Flow dynamics – Norway
    • Flow dynamics – Algeria
    • Flow dynamics – Southern Corridor
    • Flow dynamics – LNG
  • Risks and uncertainties

In this report there are 31 tables or charts, including:

  • Executive summary
  • Economic outlook
    • Q3 2016 GDP growth (2010-2035)
  • Policy and regulation
    • Energy Union package
    • EU Energy Security Package
    • EU Third Energy Package
    • EU climate-energy targets
    • Carbon emissions forecast versus targets - EU 28
  • Demand
    • Gas demand by sector
    • Capacity growth by fuel*
    • Power generation mix*
  • Supply
    • Domestic gas supply
  • Infrastructure
    • Key infrastructure
    • Regas capacity by status
    • Regas capacity and contracted volumes
    • Pipe capacity
    • Pipe capacity and contracted volumes
  • Contracts
  • Supply-demand balances
    • Europe supply-demand gap
    • Europe contestable demand and competing supply
    • Europe demand and supply mix
    • Europe contestable demand and supply mix
    • Russia contracted and uncontracted flows into Europe
    • Russia flows by major pipelines into Europe
    • Norway contracted and uncontracted flows into Europe
    • Norway flows by major pipelines into Europe
    • Algeria contracted and uncontracted flows into Europe
    • Algeria flows by major pipelines into Europe
    • Turkey demand and supply (including transit)
    • Southern Corridor flows (transiting Turkey)
    • Contracted and flexible LNG flows into Europe by importing regions
    • Total LNG flows into Europe by importing regions
    • Contracted and flexible LNG flows into Europe by exporting regions
    • Total LNG flows into Europe by exporting regions
  • Risks and uncertainties
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