Study on Underground Gas Storage in Europe and Central Asia … · 2012-01-24 · STO SSO NRA MA...
Transcript of Study on Underground Gas Storage in Europe and Central Asia … · 2012-01-24 · STO SSO NRA MA...
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Study on Study on Underground Gas Storage Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
Working Party on GasWorking Party on GasGeneva, January 24, 2012Geneva, January 24, 2012
G.G.--H. Joffre (Storengy) et al.H. Joffre (Storengy) et al.
United Nations Economic Commission for Europe Committee on Sustainable Energy
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Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
Economic Commission for Europe / Committee on Sust ainable Energy
Summary :• Introduction• Structure of the UGS Study• Current status of the UGS Study• Recommendations
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Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
Economic Commission for Europe / Committee on Sust ainable Energy
Introduction :• As a reminder, this Study should benchmark all aspe cts of
underground gas storage in Europe and Central Asia• As principles :
• make efficient use of already available data (coope rate with IGU, GSE, ERGEG, IEA?…),
• Use a country by country approach (country representative) for gathering data but also take in to account a market area concept
• In the 2010 WPG session, an overview of storage bus iness and of the 90’s UGS Study results were presented
• In the 2011 WPG session, a more detailed descriptio n of the current organization of the Study were presented an d its potential improvements were proposed.
4Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (1) :
• Chapter 1 : New and emerging technologies : • to identify innovations in UGS business that may
lead to a better cost efficiency, • to list the technologies that have been put in plac e or
that are planned to be put in place to improve efficiency of the facility, in terms of quality of service, responsiveness to Client or cost
• Heads : Mr A. Iskhakov (Gazprom), Mr H. Spreckels (E-On Gas Storage) and Mr C. Gomez-Montalvo (Geostock)
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
5Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (2) :
• Main items in Chapter 1 : • automation of well monitoring, • intelligent UGS (operational / commercial optimizat ion),• increasing of UGS daily peak production• reduced environment impacts, • drilling technologies,• offshore technologies,• capex and opex optimization
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
6Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (3) :
• Chapter 2 : Current UGS status : set up an updated data base for all existing UGS plants in each country,
• Heads : Mr M. Sandu (Romgaz), Mr J. Mandl (ÖMV) (resigned) and Mr B. Ernecic (PSP) with support of Mr J. Wallbrecht (BEB / IGU) and Mr A. Iskhakov ( Gazprom)
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
7Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (4) :
• Main items in Chapter 2 :• Calorific value• working volume,• cushion gas volume,• nominal and peak withdrawal rates,• injection rate,• min and max pressure,• compression power,• number of wells,…
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
8Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (5) :• Chapter 3 : Market structure and legal framework :
describe the legislation and guidelines for UGS market organization (incl. TPA rules) and UGS services,
• Heads : G.-H. Joffre (Storengy) with support of Ms A. Brandenburger (RWE Gasspeicher) and Mr U. Duda (E.On Gas Storage)
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
9Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (6) :• Main tems in Chapter 3 :
• Part A (to be answered by regulation authorities):
• Currrent regulatory access• Principles of Capacity Allocation Mechanisms (first
come first served, first committed first served, auction, open season, pro rata, …)
• Principles of Congestion Management Procedures (first come first served, first committed first ser ved, market based, pro rata, secondary market, use it or lose it, use it or sell it,…)
• Main outlook for future years
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
10Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (7) :• Main tems in Chapter 3 :
• Part B (to be answered by companies for each storage)
• TPA regime• Storage service (virtual, hub, firm, interruptible,
parking, lease, bundled, unbundled,…)• Characteristics of contracts (duration, volume,
withdrawal and injection capacities, price)• Principles of CAM and CMP• …
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
11Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (8) :• Main tems in Chapter 3 :
• Part C (to be answered by companies and regulation authorities)
• Access to transmission capacities for • Existing storage sites,• Extension and new storage sites
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12Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (9) :• Chapter 4 : UGS projects : set up a data base for
planned projects in each country including criteria for selecting projects,
• Heads : Mrs E. Wicquart (EDF) (resigned) with support of Mr J. Wallbrecht (BEB / IGU), Ms A. Brandenburger (RWE Gasspeicher) and Mr U. Duda (E.On Gas Storage)
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13Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (10) :• Items in Chapter 4 :
• Status (planned, feasibility , design, committed, b udget approval, under construction)
• Calorific value• working volume,• cushion gas volume,• nominal and peak withdrawal rates,• injection rate,• min and max pressure,• compression power,• number of wells,…
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14Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (11) :• Chapter 5 : Legal framework for development and
operation : provide with all useful information (legislation and procedures) necessary for granting consents and authorizations to SSO,
• Heads : Mr T. Korosi (Hungarian Energy Office), Mr W. Rokosz (PGNiG) and Mr G.-H.Joffre (Storengy) with support of Ms A. Brandenburger (RWE Gasspeicher) and Mr M. Laczko (E.On Földgaz Storage),
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
15Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the new study (12) :Items in Chapter 5A. Questionnaire to be sent to national mining authoritiesIn the case of new, existing and abandonned sites
• Which authority for supervision and decision ?• Which procedures and which regulating laws ?• Duration, environmental impact studies• Obligation of landowners• Ownership (cushion gas and non recovered
hydrocarbons)• Incentive role of State/local authorities (evolutio n of
regulation framework);
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16Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the new study (13) :Items in Chapter 5B. Questionnaire to be sent to storage system operators (satisfaction survey)
• How works the regulation and authorization process related to storage-related activities ?
• How works the regulation related to landownership issues ?
• How work the other provisions related to storage operation ?
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
17Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (13) :• Chapter 6 : Tariffs of UGS : provide with
information (if available and taking into account confidentiality issues) about construction costs and operation costs,
• Heads : Mr G. Martinus (Gas Terra) (resigned) with support of Mr W. Rokosz (PGNiG)
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18Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (14) :• Main items in Chapter 6 :
• Investment and operating costs in each storage faci lities • Average investment and operating cost for each type and
size of storage• Cushion gas (included ?, depreciation ?)• Accuracy of cost estimate
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19Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (15) :• Chapter 7 : Outlook and main expected trends of
UGS markets : describe the gas market (supply and demand) evolution and define the UGS needs subject to this evolution .
• Heads : Mr G. Martinus (Gas Terra) (resigned) with support of Mr J. Wallbrecht (BEB / IGU), Ms A. Brandenburger (RWE Gasspeicher) and Mr U. Duda (E.On Gas Storage)
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20Economic Commission for Europe / Committee on Sust ainable Energy
Structure of the Study (16) :• Main items in Chapter 7
For 2010, 2015, 2020 and 2025 : • National natural gas supply• National maximal peak demand• Storage supply• National storage demand
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Structure of the Study (17) :• Conclusion and recommendations : incl.
Comparison with the first study.• Annexes : glossary, contact details, maps, data
base, units, bibliography,…
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Structure of the Study (18) : responding parties
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
STO SSO NRA MA OtherChapter 1 XChapter 2 X XChapter 3.A XChapter 3.B XChapter 3.C X XChapter 4 X XChapter 5 X XChapter 6 X XChapter 7 X X X X
Explanation of termsSTO Storage Technical Operator (may be the same as the SSO)SSO Storage System Operator (incl. commercial) NRA National Regulatory AgencyMA Mining AuthorityOther Representative Organisations (IGU, GSE, Cedigaz, Eu rogas), TSO's,
Consultants
23Economic Commission for Europe / Committee on Sust ainable Energy
Current status of the Study (quantitative estimate) :
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
2008 2009 2010 2011 2012
NUMBER OF MEETINGS
3 5 4 4 0
TERMS OF REFERENCE
100%
QUESTIONNAIRE 0% 80% 95% 99% 100%
ON-LINE QUESTIONNAIRE
0% 10% 95% 99% 100%
LETTERS OF INVITATION
0% 95% 95% 100% 100%
IGU CONTRACT 0% 10% 100% 100% 100%
ANSWERS TO QUESTIONNAIRE
0% 0% 0% 0% 25 -30 %
ANALYSIS AND WORDING THE REPORT
0% 0% 0% 0% 0%
24Economic Commission for Europe / Committee on Sust ainable Energy
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
Chapter 1 2 3A 3B 3C 4 5A 5B 6 7
Fully & partially completed by SSO
31 28 1 27 24 21 10 7 9 13
35 (=32 %)
not answered 83
% of working gas volume (TSSO)
60 % (representing 112 bcm vs 200 bcm Working Gas Volume )
Fully or partially completed by NRA
12 10 3 1 4
16 (=23%)
NRA not answered
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Available data :
25Economic Commission for Europe / Committee on Sust ainable Energy
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
Example Chapter 1 : Innovation in UGS technological developmentTotal Total Total, % of answered Total, % of answered
AppliedToday
Expected/Needed in Future
AppliedToday
Expected/ Neededin Future
1.1.1 UGS created in reservoir without trap
6 3 19.35 9.68
1.1.2 UGS in depleted oil fields 12 7 38.71 22.58
1.1.3 UGS in fractured water bearing reservoirs
6 4 19.35 12.90
1.1.4 UGS for associated gas from oil fields
6 5 19.35 16.13
1.1.5 UGS in porous media projected for non cycling operation
3 4 9.68 12.90
1.1.6 UGS in abandoned mines 5 3 16.13 9.68
1.1.7 UGS for helium concentrate 3 6 9.68 19.35
1.1.8 UGS for СО2 sequestration (CCS)
3 7 9.68 22.58
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Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
Economic Commission for Europe / Committee on Sust ainable Energy
Current status of the Study (weaknesses):• The Study progress was not satisfactory in 2012;• Due to competition and workload, Company representa tives
are less and less available for co-operative works : 2 Heads of Chapters (4 , 6 & 7) resigned;
• The relatively low level of interest of a number of gas companies to contribute actively to the completion of the questionnaire (60%) and to participate in the UGS S tudy ;Lack of data for Chapters 5, 6 & 7;
• The support of an external service provider was ser iously considered but not approved due to the lack of fund s and potential conflict of interest;
• Data was collected in the on-line questionnaire but their extraction and processing tools were not available
���� analysis of data was not possible.
27Economic Commission for Europe / Committee on Sust ainable Energy
Recommendations : 1. To delete Chapter 6 & 7 due to the lack of data a nd Head of
Chapter, 2. To continue for securing the current participatio ns,3. To lobby in the gas business community for more p articipants
(companies, national bodies and consultants),4. To reinforce the management of the Study using a reinforced
UNECE Secretariat and to put in place a relevant or ganization (IT, secretariat),
5. To enhance efforts to foster completion of the St udy by 1 July 2012 and to present a first draft to World Gas Cong ress in June 2012 and a final report for consideration by the 2 3rd session of the Working Party on Gas;
���� For a successful future of the Study, these recommendations should be seriously taken into acco unt and cautiously implemented.
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Thanks for your attention
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
29Economic Commission for Europe / Committee on Sust ainable Energy
Back up
Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
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Study on Underground Gas Storage Study on Underground Gas Storage in Europe and Central Asiain Europe and Central Asia
Economic Commission for Europe / Committee on Sust ainable Energy
Next steps : Why should we continue (strengths and opportunities)? :
• A pluralist co-operation : as participants may be c ompanies, national bodies, consultants,.., the exchange may b e more fruitful
• A relevant geographic area: Europe and Central Asia makes sense, marketwise
• A multidisciplinary approach : technical, legal, co mmercial, economic,..
• And initially the needs for updating the Study were defined as follows:
• The market became more complex, particularly becaus e the EU Directives for liberalization of gas market (TPA concept) : invest ment decision making then became more difficult,
• Many newcomers entered the market as operators (SSO s) or as customers (TSOs, shippers, DSOs and power producers),
• Due to the further decline of EU gas production, UG S becomes and will become more and more important,
• Investors and developers of Gas Industry need to ha ve benchmark for their investment decisions.
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1. The key role of natural gas storage in security o f supply
2. Gas storage development perspectives
3. Risks and incentives
4. Conclusions
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1. The key role of natural gas storage
in security of supply
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Security of supply : Security of supply : a a «« highhigh --visibilityvisibility »» topictopic
January 2009
January 2010
October 2010
Reduction in gas supply in %, January 2009
Regulation onSecurity of Gas
Supply
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Natural gas storage : Natural gas storage : A key role in the A key role in the European policyEuropean policy
sustainability
security of supply
The European energy policy
� Large proven reserves (conventional + unconventional )
� Large panel of routes and suppliers
� A storable energy
� A market-oriented storage industry which proved its efficiency through crisis
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Austria
Belgium, Portugal,Switzerland
Bulgaria
Hungary
Ireland
Italy
Netherlands
Poland
Romania
Slovakia
Spain
United-Kingdom
Danemark
Czech Republic
Estonia, Finland,Lithuania, Lux.
0%
10%
20%
30%
40%
50%
0% 20% 40% 60% 80% 100%
Imports / Demand (%)
Sto
rage
/ D
eman
d (%
)
EU-27Storage/Imports = 25% EU-27 2020e
EU-27 2030eGermany
France
Source: SG Equity Research / Eurogas / GSE 2008
Another way to look at Another way to look at storage in Europestorage in Europe
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2. Gas storage developmentperspectives
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1. Need for security of supply � Decline of local production
� Increase of import contracts & remoteness of sourcing
=> two major driverstwo major drivers
Sou
rce
: Ced
igaz
200
5
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2. Need for flexibility� Decline of local production
� estimated additional seasonal swing demand ≈ 14 Bcm in 2030
� Development of trading
� Exple : traded volumes on NCG
� Increase of CCGT
� Increase of wind power generation
� estimated additional peak swing demand ≈ 10 Bcm in 2020
=> two major driverstwo major drivers
Sou
rce
: E.O
N E
nerg
y T
radi
ng
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19,6
12,3
14
1,6
2,3
2,8
3,7
5,04,3
4,1
1,0
0,7
2,7
0,4
Spain
France
Belgium
UK
Netherlands
Germany
Poland
Latvia
Italy
Denmark
Czech R.
Slovakia
Austria
Croatia
Romania
Bulgaria
0,2
Portugal
Source: GSE 2009, CEDIGAZ 2009, IGU 2009
4,2
3,1
14,3
P
P
P
P
p
Storage volumesStorage volumesin Europein Europe
–– current situation current situation ––Hungary
0,6
Europe storage facilities : working gas volume in bcm
Total around 80 bcm
1,6
Turkey
40
19,6
12,3
14
1,6
2,8
3,7
5,0
4,3
4,1
1,0
0,7
2,7
0,4
Spain
France
Belgium
UK
Netherlands
Germany
Poland
Latvia
Italy
Denmark
Czech R.
Slovakia
Austria
Croatia
Romania
Bulgaria
0,2
Portugal
Source: GSE 2009, CEDIGAZ 2009, IGU 2009
4,2
3,1
14,3
P
P
P
P
p
2,3
Storage Storage projectsprojectsin Europein Europe
Hungary
0,6around 70 bcm
0,2
Albania
3,2
0,1
2,4
0,1
Bosnia-H.
0,5
0,8
1,8
8,7
2,3
11
1
0,5
Lithuania4,5
1,7
2,2
5,8
Serbia
5,9
20
Pro
ject
in b
cm
Cu
rren
t in
bcm
40
1,6 1,5
Turkey
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• A worldwide oversupply situation � Economic crisis => fall of the demand (2009 : -3% / -4%)
� New GNL capacities (+50% from 2009 to 2013)
� Rise of non conventional gas
• Impact on the flexibility market � Spot prices < Long term oil indexed prices
� Squeeze of the seasonal spread
=> ……but short term uncertaintiesbut short term uncertainties
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3. Development :Risks & incentives
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� Stability of the regulation Stability of the regulation : a necessity for attracting funding
Regulatory instabilityRegulatory instability
(three directives in ten years !)
several dozen billion EUR to be invested in the next 20 years
RISK
Incentives
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- strategic storage might be definitely damaging
- choice of access regime should be market-oriented
- negotiated TPA should be the preferred choice wherever market conditions allow : ⇒ best regime to facilitate investments⇒ best regime to foster commercial creativity and provide best response to the demand
Inappropriate regulatory frameworkInappropriate regulatory frameworkRISK
Incentives
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4. Conclusion
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� Transparency
� Market Orientation
� Dialogue
keywords