Evaluating Diverse Opportunities for Qatar Within the European Gas Sector

Abstract

Europe's increasing demand for energy, coupled with the ongoing strain in the political relations with Russia due to the ongoing Ukrainian conflict, has triggered the European continent to look for energy alternatives and become less reliant on Russian natural gas imports in the years to come. The diversification of natural gas supply to Europe is important, especially after the disruption of the pair of offshore pipelines (Nord Streams 1 and 2) that exist in the Baltic Sea and run from Russia to Germany. Hence, a detailed analysis of current situation in the EU is necessary to identify plausible future prospective plans to enable diversification of their gas imports. This paper studies the current situation of the LNG market in Europe, and identifies the main gas suppliers and gas importers in the European gas market. Moreover, this study proposes a diversification plan that involves the EU establishing competitive long-term opportunities for gas imports with Qatar. There exist multiple prospects for Qatar to expand its LNG trade contracts with the EU, via different routes. In order to identify the best possible routes for their natural gas exports, a Linear Program (LP) mathematical model has been developed to help identify optimal LNG exporting scenarios from Qatar to Europe. The model accounts for shipping, regasification terminals in Europe, and existing network pipe structures that can be used for gas distribution within the European continent. The main pipelines that were considered in this study for distribution are assumed to be operated by the European Network of Transmission System Operators for Gas (ENSTOG). Hence this study investigates several LNG shipping routes from Qatar to Europe coupled with major European regasification units, followed by a distribution plan via pipeline infrastructure by ENSTOG. Moreover, the possibility of introducing regasification routes through intermediate countries (such as Turkey) has also been studied. Subsequently, the proposed mathematical model is able to identify optimal LNG exports from Qatar to Europe, and the best routes for shipping, regasification and distribution via existing pipeline infrastructure within Europe. Hence, several different exporting scenarios from Qatar to Europe have been studied using the proposed model.