Sonatrach and European gas market

Résumé du document

Algeria represents 3.12% of the world gas reserves (Hassi R'mel : one of the largest deposits in the world). Gross production of 150 billions cm3 of gas in 2006 (3.88 % of the total hydrocarbon production). Net traded production of about 81 billion cm3 of gas (66% from Hassi R'mel field). Export capacities of 38 billion cm3 of gas pipeline and nearly 27 billion cm3 via LNG. Fleet of 9 LNG tankers and 6 LPG carriers
Important gas pipeline network. "Enrico Mattei": Algeria to Italy. "Pedro Duran Farell": Algeria to Spain. Objective : "to ensure the free movement of gas, reinforce security of supply and industrial competitiveness in Europe." Creating a unique natural gas market in Europe: integrated, competitive and regulated at EU scale. Intensify the competitiveness of European companies in energy sector compared to their international competitors within a unrestricted market. Improve global efficiency of the European gas organization, and assure the ability for businesses and private customers to choose their power and gas suppliers freely in a competitive.

Extraits

[...] - Accroître la compétitivité des entreprises européennes du secteur de l'énergie face à leurs concurrents internationaux grâce au libre fonctionnement du marché. - Améliorer l'efficacité globale de l'organisation gazière européenne et garantir aux consommateurs individuels et industriels la liberté de choix de leurs fournisseurs. [...]

[...] Ainsi la pression concurrentielle doit contraindre les opérateurs à réaliser des gains d'efficacité et/ou diminuer les marges (en favorisant l'économie des d'échelles) < number > < number > Liberalizing EU Energy Sector Traditional market Long term contracts : a commitment of 20 to 25 years Payment obligation « Take or Pay » for the buyer, and supplying for the seller A price index linked on the competitive energies The gas is negotiated from the source Liberalized market Short term contracts : 1 month month, to a maximum of 10 years « Take or Pay » replaced by "Take or release“ possibility to re sell the surplus on « spot market » Price determined by the gas market (the Henry hub (USA) or the National Balancing Point (NBP) (Royaume-Uni) A large part of the transactions are negotiated at the level of Gas hubs < number > < number > Problem Statement Considering the evolution of the European gas market, how can Sonatrach take advantage of this opportunity ? Strategy final slide 9.bmp < number > la demande devrait croître fortement pendant la prochaine décennie pour atteindre les seuils de : 420 à 650 milliards de m3 d'ici 2010 et 533 à 650 milliards de m3 d'ici 2020. [...]

[...] Im- portations gazières de l'Union Européenne qui atteindront les 400 milliards de m3 en 2020 contre 200 milliards de m3 actuellement. Il faut aussi ajouter que cette augmentation de l'importation s'accompagnera d'une diversification des sources d'approvisionnement. [...]

[...] la liste des fournisseurs traditionnels de gaz pour l'Union Européenne: l'Algérie, les Pays bas, la Norvège, la Russie et le Royaume Uni, À long terme, sept régions seront des fournisseurs gaziers potentiels de l'Europe : la mer du Nord (Norvège, UK, Danemark), l'Afrique du Nord (Algérie, Egypte, Libye), la Russie, la région de la Caspienne (Azerbaïdjan, Kazakhstan, Turkménistan), les pays du Golfe, l'Afrique de l'Ouest (Nigeria, Angola), l'Amérique du Sud (Trinidad et Tobago, Venezuela). < number > < number > Source: CEDIGAZ The European gas market < number > < number > DD20060530-08 The European gas market < number > Gas Actors Exploration & Production Transportation Trading Refining Retailing < number > < number > GAZPROM The largest Russian company and the biggest extractor of natural gas in the world Russian natural gas production (with reserves of 28,800 km³)  It controls of the world's gas reserves By the end of 2004 GAZPROM was the sole gas supplier of (but not only): Bosnia-Herzegovina - Estonia - Finland - Macedonia - Latvia - Lithuania - Moldova - Slovakia The competitors gasprom.jpgstatoil.jpg STATOIL The largest petroleum company in the Nordic countries and Norway's largest company Shareholders: the Norwegian state still holds majority ownership, with 64% STATOIL exportations: Germany, France, Belgium, Ireland – Austria, Czech Rep, Netherlands – Spain, UK (5-10 – Italy, Turkey Strategy final slide 14.bmpStrategy final slid 15.bmp < number > < number > Source : European Union Commission Studies Medgaz Project Galsi Project Short-run: Pipeline's Projects < number > < number > An increasing part of the transactions are made at the gas hubs (supply gap), with higher margins The company acquired the experience and the technology to develop its own distribution capacity Since implementation, the company has built good business relations with the major actors of the European market 24-321~South-Park-Posters.jpg Let' s Make a VERTICAL INTEGRATION RECOMMENDATIONS The European gas market will certainly increase further. [...]

[...] Sonatrach and european gas market < number > < number > Introduction Liberalizing EU energy sector Problem statement The European Gas Market Gas actors The competitors Short run: Pipelines projects Recommendations AGENDA < number > < number > SONATRACH National Oil & Gas company Created in 1963 Began exporting in 1971 Turn over 2006 : $ 53.5 billion < number > < number > International gas dimension Algeria represents of the world gas reserves (Hassi R'mel : one of the largest deposits in the world) Gross production of 150 billions cm3 of gas in 2006 ( of the total hydrocarbon production) Net traded production of about 81 billion cm3 of gas from Hassi R'mel field) Export capacities of 38 billion cm3 of gas pipeline and nearly 27 billion cm3 via LNG Fleet of 9 LNG tankers and 6 LPG carriers Important gas pipeline network « Enrico Mattei » : Algeria to Italy « Pedro Duran Farell » : Algeria to Spain < number > Gas reserves representing 56% of the total global hydrocarbon reserves Hassi R'mel : one of the most largest deposits in the world Gross production of 150 billions cm of gas in 2006 ( of the total hydrocarbon production) Net traded production of about 81 billion cm of gas from Hassi R'mel field) Export capacities of 38 billion cm of gas pipeline and nearly 27 billion cm via LNG Fleet of 8 LNG tankers and 6 LPG carriers Important gas pipeline network supplying the domestic consumption centres, the liquefaction and international clients - « Enrico Mattei » : Algeria to Italy - « Pedro Duran Farell » : Algeria to Spain < number > < number > < number > < number > Objective : « to insure the free movement of gas, reinforce security of supply and industrial competitiveness in Europe » : Creating a unique natural gas market in Europe: integrated, competitive and regulated at EU scale Intensify the competitiveness of European companies in energy sector compared to their international competitors within a unrestricted market Improve global efficiency of the European gas organization, and assure the ability for businesses and private customers to choose their power and gas suppliers freely in a competitive market place Liberalizing EU Energy Sector The Directive « Gas » (1998 / 2003) < number > directive « gaz » de 1998 de l'Union européenne et qui a été complétée par une autre directive votée en 2003 Cette libéralisation constitue une évolution institutionnelle majeure devant largement bouleverser l'organisation du marché gazier européen Les objectifs de la directive « gaz » : « assurer la libre circulation du gaz et renforcer la sécurité de l'approvisionnement et la compétitivité industrielle en Europe ». [...]