According to data supplied by Cedigaz on the main features of 2007, natural gas consumption in Europe fell during that year. We are therefore seeing a slowdown in the historical expansion of natural gas, a situation which had already begun in 2006. The main reason was the mild weather during the heating season (bearing in mind that 40% of the natural gas in the EU is used by the domestic-commercial market).

It is therefore not surprising that some gas liquefaction projects have slowed down (in Qatar, Egypt or Trinidad, for example), although the general impression in the market is that it is tight on the supply side. Three new projects will be operative within two years: the Australian Pluto, the new train for the Skidda project, destroyed by an explosion in 2004, and the Peru LNG. These three received the final investment go-ahead last year or at the end of 2006.

According to Cedigaz, the best option for natural gas in Europe has been in electricity generation. Besides an increase in the number of cycles in operation, there has been a slight reduction in the euro price of imported gas (7%), in contrast to the increased coal price, which rose from 65$/tonne in the first quarter to 125$/tonne at the end of the year, a significant rise, despite the depreciation of the dollar against the euro. This increase is explained basically by the physical supply limitations of this energy source in the short term.

The figures available to Eurogas at the time of writing indicate that most countries of the European Union situated in colder climes and where the sector is mature (with high penetration of the residential market) saw a decline in gas demand.

For example, in France sales declined by 3%; in Germany by 5%; in Austria by 6.1%; in Belgium by 0.4%; in the Netherlands by 3.1%; in the Czech Republic by 6.8%; in Denmark by 12.2% and in Hungary by 5.7%. In other countries where the sector is mature there was a very slight increase, such as Italy with 0.5%, and the United Kingdom where it was 1.3%. The countries which saw the greatest growth in demand were Greece (+23,9%), Lithuania (+18%), Ireland (+8.6%), Portugal (+7.4%), Spain (+4.3%) and Sweden (+3.6%). With regard to Russia, its gas consumption increased by between 1% and 1.3%, somewhat less than the figures seen in recent years.

Turning to Italy, where consumption in 2007 was 83 bcm, the forecasts for 2020 rise to 114 bcm of natural gas, of which 53 bcm would go into electricity generation.

SIn its bulletin, Cedigaz says that gas demand in the US market has been spurred on by the fall in prices in relation to previous years and by sustained economic activity.