EUChina Energy Conference

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EU-China Energy Conference Shanghai 20-21
February 2006 Natural gas and sustainable
development our common challenges Presentation
by Jean-Marie Devos, Secretary General Eurogas ?
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EU China Our common challenges

• China and EU
• are major energy importers
• have growing energy demand and consumption
• are concerned about security of energy supply

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Summary

• Presentation of Eurogas
• Energy Efficiency, incentives, measures and
  instruments
• The European natural gas supply -figures
• Security of supply
• Conclusions

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• Presentation of Eurogas

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A Forum and an Ambassador of the European natural
gas industry

• Eurogas is a non profit association governed by
  the Belgian law.
• Offices are located in Brussels
• Objectives
• To promote the interests of its membership,
  companies, national federations and associations
  involved in the supply, trading and distribution
  of natural gas, and related activities such as
  storage and LNG
• To propose the development of natural gas in
  Europe particularly in the legal, economic,
  technical and scientific areas to prepare studies
  and to promote cooperation within the gas
  industry
• To propose the smooth functioning of the European
  internal gas market
• To take stance on issues of interest to the
  European natural gas industry with respect to
  international and supra-national organizations
  including but not limited to the European
  Institutions and to public opinion.

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33 members in 21 countries
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(No Transcript)
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• Energy efficiency, incentives, measures and
  instruments

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• Energy efficiency is an important aspect of
  security of supply and improved competitiveness
• Eurogas is fully committed to energy efficiency
  as part of sustainable development
• Eurogas members are already engaged in major
  energy efficiency programmes

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Energy efficiency is about

• Saving money
• by informing customers that gas as a heating fuel
  will contribute to save energy and to decrease
  domestic costs

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Energy efficiency should lead to
Energy efficiency is about

• Change in the energy utilization attitudes of
  customers
• by actions lead by companies to encourage
  intelligent use of gas

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Energy efficiency is about

• Encouraging use of new, more efficient appliances
  and of modern technology

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Energy efficiency is about

• Helping customers save energy
• Encouraging training to increase knowledge and
  competence of professionals

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• Facts and Figures

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• World proven gas reserves
• Natural gas consumption by area
• Development of natural gas supplies until 2020
• Breakdown of EU25 natural gas supplies
• EU25 imports by country

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World proven gas reserves
Source BP
Total Proven gas reserves 180 Tcm
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Natural Gas Consumption by Area
Source BP
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Development of Natural Gas Supplies in the EU25

• billion m³

Remark Malta and Cyprus are notsupplied with
natural gas
Source E.ON Ruhrgas
S2308_20m³
LNG share (in imports)
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15
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Breakdown of EU25 Natural Gas Supplies
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EU25 imports in 2004
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• Security of supply

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The conditions for ensuring Security of Supply

• Access to reliable and diversified sources
• Diversity of robust delivery routes
• Importance of politically stable and legally
  clear relations with major non EU production
  areas (Russia, Mediterranean countries, new
  emerging areas, )
• Importance of level-playing field (EU-Russia
  dialogue, etc)
• Dialogues with major consumption areas (China,
  US, India, South America etc)
• Authorities must promote a competitive business
  climate
• Long term contracts and spot markets have both a
  role
• Long term investments
• Sustainable and efficient energy

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The Investment Challenge

• Upstream investments in production and
  transportation capacities will be necessary to
  meet gas demand in European Countries
• How to attract investment ?
• The needed balance between right policy/legal
  framework and industrial initiative
• governments may have a strategic interest in
  increased cooperation over gas supplies, it is
  not them that will invest in new infrastructures
  projects (). It is rather companies that will do
  so, based on objective commercial consideration
  and risk analysis (Ria Kemper, Sec. Gen. Energy
  Charter Secretariat, X/2003)
• Need for sound business decisions and market
  analysis with close cooperation of economic
  operators and financial institutions
• Once defined from technical and business angles,
  projects should be facilitated through
  appropriate legal/regulatory/fiscal tools.

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Conclusions

• EU and China face common challenges
• Security of supply
• Competitive natural gas
• Sustainable use of energy
• International cooperation
• Thank you