The recent gas conflict between Russia and the Ukraine in full illustrates the vulnerability in Europe’s energy supply. The conflict, which left hundred thousands of Central European homes without heating, has triggered a debate about alternative energy supply routes for Europe.
Despite ambitious EU measures on energy saving and development of alternative energy generation, the continent will for decades remain heavily dependent of hydrocarbon supplies.
More gas from Norway, Russia
As a matter of fact, in the years to come, the EU countries will need far more gas, and it is the non-EU members Norway and Russia which can provide the lion’s share of the extra power.
Both countries are working hard to meet demands. According to figures from the Norwegian Petroleum Directorate, Norway will increase its gas exports from 99,3 billion cubic meters in 2008 to 112 billion cubic meters in 2011. Russia meanwhile intends to boost its gas production towards 560 billion cubic meters in 2010 and then further towards 590 billion cubic meters in 2020.
Arctic resources
Both Norway and Russia have by far most of its remaining hydrocarbon reserves in the High North. It will not be easy neither for Norway, nor Russia, however to meet the rapidly growing EU demand with Arctic gas.
Field development is highly complex and expensive and logistics, port development and export routes required new technology, until recently unprecedented in the oil and gas industry
Still, a rapid development of Arctic reserves might be possible if joining the best of interests. As Rune Rafaelsen, General Director of the Norwegian Barents Secretariat, noted in a recent comment in newspaper Nordlys, the two oil and gas nations Norway and Russia can together by using their respective comparative advantages contribute to a successful development of the Barents Sea.
The Shtokman field
Mr. Rafaelsen believes a rapid and successful development of the Shtokman field, one of the biggest offshore gas fields in the world, will give win-win situation for all parts involved.
In addition to providing technology and cash through Shtokman partner StatoilHydro, Norway should also contribute with port capacities, the Barents Secretariat leader argues. He believes northern Norwegian ports can provide a necessary supplement to ports in Murmansk and Arkhangelsk Oblasts.
-A massive development of ports and transport solutions on the Norwegian side of the border will benefit all parts, Mr. Rafaelsen says. For the Russian side, additional and efficient port services are made available, the Norwegian side secures participation and the EU gets its much-needed gas, he adds.
