The patterns are the same as those for the competitive burner tip netback prices in table 2.7. The margins potentially available to cover the transmission and distribution part of the value chain tend to be higher for liquefied petroleum gas (LPG) and diesel (the low-volume end of the natural gas market) and lower for the fuel oils (the high-volume end of the market). This is the expected relationship between margins and volume. The comparison of these margins with the estimated costs of transmission and distribution is presented in the section titled “Gas Value Chain.”
Gas Sources of Potential Interest to Southeast Europe The sources of gas that could supply Southeast Europe are reviewed in this section, followed by published data for the proven reserves of each country, and the supply availability and market dynamics.
Supply Options Increased gasification requires increased supply. In assessing the economics of incremental new supplies, the study needs to consider both sources and delivery routes via pipeline or LNG. The gas sources taken into account in the study include fields in a vast arc centered on Central and Eastern Europe and sweeping clockwise from the Russian arctic all the way around to Algeria.1 The sources and potential routes include • • • •
Russian gas, transported along existing routes or via new routes Caspian gas, transported through new pipeline routes southern gas sources—Islamic Republic of Iran, Iraq, and Egypt LNG, most likely delivered within the Mediterranean basin from North African suppliers in Egypt, Libya, or Algeria.
Gas sources far to the northwest of the nine SEE markets (British, Dutch, and Norwegian North Sea gas) are not included in the list because the demand of Western European markets is, and is expected always to be, more than sufficient to absorb all of that production, so that gas never would flow as far as Southeast Europe.
Reserves Table 3.2 shows the proved reserves and production for gas sources (by country) that are of potential interest to Southeast Europe. According to the Statistical Review of World Energy (BP 2006), the Russian Federation, the
1
Geographically, North Sea gas may be closer to Southeast Europe than some of these other sources (or at least equidistant with them), but the large gas demands of Western Europe are in between the North Sea and Southeast Europe, so North Sea gas does not, and is not expected to, flow as far south and east as Southeast Europe.
Supply-Side Options
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