Impact of LNG imports and shale gas on a European natural gas diversification strategy

Abstract

In this article the impact of liquefied natural gas (LNG) imports and shale gas exploitation on a European dependency from main gas suppliers is analysed. For this purpose we introduce the “Gas Market Model (GaMaMod)” that represents the European natural gas market within a bottom-up approach. In order to analyse the European gas supply, we look at two main scenarios for the year 2025 with regard to an extension of LNG import capacities and an increased exploitation of European shale gas. Within the scenarios, we modify the basic conditions with respect to the level of demand and present the supply mix in the European gas market. Our results show that LNG and shale gas have an effect on the diversification of gas supply, but the effect is quite limited and main European gas suppliers, especially Norway and Russia, will still remain dominantly in the European gas supply.