2012-02-03 16:26:58 - Spain Oil and Gas Report Q1 2012 - a new market research report on companiesandmarkets.com
The pace of economic recovery and renewed growth is critical to Spain´s energy market, as it will drive the country´s demand for oil and natural gas â virtually all of which is imported. Spain is a key conduit for gas pipelines from Algeria and is a major receiver of LNG, an area where further expansion of capacity is possible once the economic outlook improves. Shale gas could potentially provide improved self-sufficiency, but is unlikely to revolutionise the energy outlook
The main trends and developments we highlight in Spain´s Oil and Gas sector are: - Most industry estimates had been anticipating annual gas consumption growth of 10% over the remainder of this decade. This estimate now looks highly optimistic, given Spain´s fiscal
predicament, the economic outlook and current pricing trends. Our forecast for 2016 gas consumption is 41.6bn cubic metres (bcm).
- Gross Liquefied Natural Gas (LNG) imports for 2011 are unlikely to have differed greatly from the 27.5bcm recorded in 2010, although some re-exports will have caused the net total to fall. No dramatic progress is expected in terms of LNG trade over the next few years but Spain could be importing 30bcm of LNG beyond 2016.
- Studies carried out by the government of Spain´s Basque region have uncovered about 185bcm of shale gas-in-place. Officials said that the estimate was based on gas recovered at 13 wells in the Gran Enara field in Alava. Assuming a recovery rate of 15% (slightly lower than in the US), and given successful exploration and appraisal work, the commercialisation of Basque shale gas could see Spain increase its proven gas reserves eleven-fold, from a current total of just 2.5bcm to 28.0bcm.
- In terms of oil demand, the Spanish market is no longer growing more rapidly than the EU norm, although the trend may recover once the economy is on a firmer footing. Oil consumption is expected to have risen from just over 1mn b/d in 1990 to around 1.44mn b/d in 2011. We believe demand in 2016 will average 1.52mn b/d. No meaningful local oil supply is available, meaning crude imports will reach at least 1.51mn b/d by 2016.
- Spain will require 41.6bcm of imported gas in 2016 which could cost US$19.3bn. Our oil import forecast for 2016 is 1.51mn b/d, representing US$51.5bn of expenditure. Combined 2016 oil and gas imports would therefore cost Spain around US$70.8bn.
At time of writing, we assume an OPEC basket oil price for 2011 of US$101.90 per barrel (bbl), falling to US$99.40/bbl in 2012. Global GDP in 2011 is forecast at 3.2%, down from 4.3% in 2010, reflecting slowing growth in China, a faltering recovery in the US and a worsening eurozone debt crisis. For 2012, growth is estimated at 3.6%.
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