Baku, Azerbaijan, Sept.22
By Leman Zeynalova – Trend:
Gas production forecast for the Central and Eastern European region (CEE) offers the most positive outlook, driven by increases in output from Russia and Azerbaijan, according to the outlook for Central & Eastern European oil, gas & fuel released by BMI Research (a unit of Fitch Group).
“Russian gas sales into Europe have been very strong in recent years, while the economy is recovering. Gas deliveries into China are also due to begin from 2020, increasing to 38 billion cubic meters (bcm) in subsequent years, driving total output from the country. Azerbaijan is due to produce 16 bcm from the Shah Deniz 2 project from 2019, sending gas into Turkey and Europe,” said the report.
The CEE coverage includes Albania, Azerbaijan, Belarus, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Kazakhs tan, Latvia, Lithuania, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey, Turkmenistan, Ukraine and Uzbekistan.
The CEE gas consumption outlook is strong, with y-o-y gains of 1.1 percent throughout the 10 year forecast period, said the BMI Research analysts.
“Russia is the dominant consumer and its return to economic growth will reverse the contraction in gas demand experienced over 2015 and 2016. Additionally we forecast healthy consumption growth from Kazakhstan, Turkmenistan and Uzbekistan,” said the report.
BMI Research analysts believe that Turkey is set to become the outperformer and will see stronger gas demand than its fellow CEE countries, driven by the residential, industrial and power sectors.
“Demand in Eastern Europe will improve with rebounding economic growth and falling domestic production. Though improving energy efficiency will limit the longer term demand growth. We are expecting particularly weak demand from Ukraine as it attempts to limit its dependence on Russian gas supply by supplementing imported gas with domestic coal,” said the report.
As part of the Shah Deniz Stage 2 project, gas production will increase from 9 to 25 billion cubic meters per year. The produced gas will be exported to Turkey and the European markets through the expansion of the South Caucasus Pipeline and the construction of the Trans-Anatolian (TANAP) and Trans-Adriatic (TAP) gas pipelines.
A contract for development of the Shah Deniz offshore field was signed on June 4, 1996. The field's reserves are estimated at 1.2 trillion cubic meters of gas and 240 million tons of condensate.
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