Europe to face more pipeline gas vs. LNG competition

By Murat Temizer

ANKARA (AA) - Europe is likely to see increased competition between LNG and pipeline gas in the coming years, according to BP's latest Energy Outlook published on Thursday.

According to BP, the increase in LNG supplies will lead to greater competition between LNG and pipeline gas, especially in Europe and China - two of the largest importers of gas.

In accordance with BP's scenario - the ET scenario, European gas production will decline by 40 percent causing Europe's import dependency to increase by around three-quarters by 2040.

"Europe’s existing infrastructure means it has the capacity to increase substantially its imports of either LNG or pipeline gas, especially from Russia," it said.

BP added that the ease of transportation means pipeline gas has a marked cost advantage over LNG, in addition to stressing the main constraint on pipeline imports is concern about Europe’s dependency on Russia for gas.

However, the outlook showed the development of a globally integrated gas market would ease these concerns, allowing Russia to increase slightly its share of European gas demand.