Natural Gas Consumption in EU25 in 2006

26 February 2007

According to preliminary figures and estimates from Eurogas, total natural gas consumption in EU25 has decreased by 1,1% in 2006 in comparison to 2005.

In 2006, natural gas consumption in EU25 amounted to 18 963 peta joule (PJ), i.e. 486 billion cubic metres (BCM)1, i.e. 408 million tons of oil equivalent (MTOE)2, when in 2005 it had reached 19 182 PJ / 492 BCM / 412 MTOE.

At the end of 2006, the total number of gas customers connected to the EU 25 natural gas grid rose by 1,6% in comparison to 2005, to reach 105,124 million customers (+ 1,7 million)

In contrast to the trend observed in the last few years, the EU25 natural gas consumption registered a 1,1% decrease between 2005 and 2006. Although the natural gas markets of the different countries vary significantly, some general trends across Europe may explain this slight decrease. The weather conditions are a factor of consideration. Despite a cold start, the last months of 2006 were extremely mild. Another impact on the consumption, at least in most countries, results from the reduced competitiveness of natural gas in power generation, because of generally higher gas prices in 2006 coupled with a low cost of carbon. In some countries, higher energy efficiency also played a part.

In southern Europe, the milder weather conditions have triggered a negative trend in the gas consumption. Important changes have been observed in Europe’s most dynamic gas markets, where except Greece all the countries show negative growth rates. Spain has underperformed compared to its last years growth rates, with a modest 4,1% increase, due exclusively to the power generation demand. The two main markets in the region have both registered significant drops in consumption with Italy loosing 2,1% and France 3,1% over the period. The other countries underperformed, with Portugal and Slovenia decreasing by more than 3% each.

In central Europe the generally milder weather conditions also explain the decrease in consumption recorded in most of the European countries, with Austria registering the largest decrease with 6,6% drop over the period Other countries have also experienced unusual slow downs, with Hungary, the Czech Republic and Slovenia lowering by more than 3% their natural gas consumption and the Netherlands and Slovakia, by more than 2%.

In the region the positive results of Germany (1,4%) are worthwhile noting. After a few years of stagnating figures, the good performance of the German economy can explain the increase of natural gas consumption in the power plants as well as the above average growth in the industrial sector.

The United-Kingdom has seen a drop of 5% in its consumption, reflecting in particular the impact of higher gas prices which reduced the gas consumption for power generation. In the Northern region, the cold first months of 2006 largely compensated for the milder end of the year. The countries enjoyed positive growth rate, with Estonia and Finland registering above 8% and the other countries increasing their consumption over the period, by 1,9% for Denmark, 3,6% for Latvia and 4,4% for Sweden.

The generally milder weather conditions at the end of the year have also resulted in important quantities of natural gas being injected in the storages across Europe. The stocks in 2006 increased by 309 PJ (7,9 Bcm). This represents 224 PJ (5,7 Bcm) more than the 2005 increase in stocks.

Indigenous production in the EU25 has decreased by 4,9% to 7 555 PJ (194 Bcm) over the period. Although some countries such as Austria, Spain, France and Hungary have slightly increased their production, the drop is mainly due to the 9,6% decrease in UK production.

The highest percentage of gas supplied in the EU25 comes from indigenous production, covering 38% of the total net supplies in 2006. The main external sources of supply are Russia with 24%, Norway with 17%, and Algeria 10%, followed by Egypt, Nigeria and Libya covering 2% each and the Gulf countries and Trinidad Tobago representing 1% each. Between 2005 and 2006, the imports from Egypt have doubled and those from Libya have registered an increase of 44%.

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