a Flexibility Instrument supporting Security of Supply

Shell Exploration & Production
Copyright: Shell Exploration & Production Ltd.
Gas Storage: a Flexibility Instrument supporting Security of Supply
7/21/2017
Lex Huurdeman
Manager Regulatory Affairs & Commercial Strategy - Europe
Current trends in Europe that impact gas storage
investments…
• Increasing gas import dependence
• Liberalising markets
• Supply disruptions
• Recession
2
Indigenous production will continue to play a
major role
EU + Norway gas production and demand
but needs an enabling framework
Billion cubic meters
800
• Access to resources
• Competitive fiscal and regulatory regime
700
% of demand met
by EEA production
600
500
Demand EEA
Production EU
Production
Norway
400
300
65%
200
60%
50%
40%
100
0
2004
2010
2015
2030
Source: IEA World Energy Outlook 2006 + IEA Natural Gas Market Review 2007
______________________________________________________________
• Streamlined permitting procedures
6
Onshore
areas with
restricted
access
• Liberalised gas
Waddenzee
market
Schagen
IJsselmeer &
Markerwaard
Biesbosch
Groningen Compressor Station
Source: provincies Groningen, Friesland, Drenthe,
Overijssel, Gelderland, Flevoland, Noord-Holland,
Zuid-Holland, Utrecht, Zeeland, Noord-Brabant,
Limburg; DLG Groningen; Expertise Centrum
Ministerie van LNV; Ministerie van Defensie;
Rijksdienst voor het Oudheidkundig Bodemonderzoek
(ROB); Rijkswaterstaat; International Maritime
Organization (IMO); Centraal Bureau voor de
Statistiek (CBS).
3
Import Routes
Diversity of supply and supply
routes is security of supply
Russia
Norway
48 Tcm
Caspian
9 Tcm
Iran
Iraq
Nigeria LNG
Algeria
Libya
Egypt
30 Tcm
Source: OGP
Qatar
4
Gas Storage as Flexibility Instrument
• Physical flexibility instruments compete with
virtual ones
• Regulation should be market-driven
• Regulatory framework needs to attract
investments
• Maintain level playing field in a competitive
flexibility market
5
A Strategic Role for Gas Storage?
• Commercial flexibility services can deal with most disruption scenarios
• Public Service Obligations when deemed unavoidable for specific exposures
• Impact on commercial playing field should be minimal
• PSO holders purchase flexibility services on the open market
6