Outlook for Gas Imports from New Suppliers into the EU to 2025

by Luca Franca

This paper is part of the series ‘CIEP Perspectives on EU Gas Market Fundamentals’. This is the result of a comprehensive research project conducted in 2016 with a view    to anticipate possible developments in gas supply and demand in the EU in the run-up  to 2025 and discuss the sustainability of the EU’s diversification efforts.

A number of countries located south-east of Europe are endowed with significant gas resources, which they wish to monetise. To various degrees, each of these countries are being considered by the EU as potential alternative suppliers of gas. Among them, those around the Caspian have long been regarded by the EU as prospective sources of diversification. In the case of Azerbaijan, long-term contracts for future supplies to the EU have finally been secured after protracted political and commercial negotiations. On the other hand, Cyprus, Israel and Iraqi Kurdistan have emerged only recently as promising alternatives.

The EU’s interest in importing gas from these countries has been reinforced by the crisis in Ukraine and the subsequent deterioration in EU-Russian relations. Although the political interest for this is high, it has so far struggled to extend to the commercial realm and faces substantial geopolitical risks. The overarching commercial reason is that all the new projects designed to bring alternative supplies to the EU market are expensive and need to be underpinned by long-term contracts,1 to which investors are reluctant to commit owing to the highly uncertain outlook for future European demand.


Clingendael International Energy Programme (CIEP)

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