Presentation is loading. Please wait.

Presentation is loading. Please wait.

BG Group Flame conference, Amsterdam, 13 th March 2007 Liberalisation and Security of Supply Steve Surrall, Director Business Development, Europe Downstream.

Similar presentations


Presentation on theme: "BG Group Flame conference, Amsterdam, 13 th March 2007 Liberalisation and Security of Supply Steve Surrall, Director Business Development, Europe Downstream."— Presentation transcript:

1 BG Group Flame conference, Amsterdam, 13 th March 2007 Liberalisation and Security of Supply Steve Surrall, Director Business Development, Europe Downstream

2 2 Legal notice This presentation includes forward-looking statements. Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from the forward-looking statements, please refer to BG Group plc’s Annual Report and Accounts 2005.

3 3 Introduction Changes in the UK gas market Implications for the European gas market European consumers able to seize opportunity? Liberalisation and security of supply

4 4 Changing composition of UK gas supply Source: National Grid New import flows replace declining UKCS production million cubic metres / day UK productionNorwayIUK importsBBLLNG terminalsStock withdrawals

5 5 Investments decided in lower price environment Source: Argus Capital deployed to supply growing import demand UK NBP month ahead (p/therm) Dated Brent ($/bbl) UK NBP (p/therm) LH scaleDated Brent ($/bbl) IUK Langeled, BBL South Hook, Dragon Grain LNG

6 6 Oil price indexation: is it sustainable? European Buyers’ Term Contract Indexation by Region Source: Energy Sector Enquiry High oil prices may encourage revision of oil-indexed pricing 0% 20% 40% 60% 80% 100% UKW.EuropeE. Europe per cent % Other Other energy prices Electricity Crude oil Heavy FO Gasoil Gas price

7 7 Implications for investment Competition and uncertain prices a challenge to investment? UK and US examples prove this is not the case BG Armada rig, North Sea

8 8 Transportation – investment in infrastructure Access to infrastructure remains problematic Alternatives to unbundling must be demonstrated Unused capacity rarely released to market BG pipe infrastructure

9 9 Storage Access to storage is key Role of the regulator –incentivise new facilities –ensure fair access for new entrants –make storage available on non- discriminatory basis TPA exemption can incentivise investment Rough storage facility

10 10 Implications for new entrants and NOCs New entrants/NOCs seeking downstream role European Commission recognises attributes of new entrants/NOCs EU member states should welcome NOCs Egyptian LNG

11 11 Conclusion European Commission assert liberalisation and security of supply can co-exist Open markets do not prevent the incentive to invest Future UK gas supply position may have knock-on effects on aiding liberalisation

12 12 Thank you


Download ppt "BG Group Flame conference, Amsterdam, 13 th March 2007 Liberalisation and Security of Supply Steve Surrall, Director Business Development, Europe Downstream."

Similar presentations


Ads by Google