WESTERN EUROPE: NATURAL GAS DEMAND OUTLOOK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R001503700009-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: December 20, 2016
• Document Release Date: April 23, 2007
• Sequence Number: 9
• Publication Date: October 15, 1981
• Content Type: REPORT

Approved For Release 2007/04/23: CIA-RDP84B00049R001503700009-2
CONFIDENTIAL
Western Europe: Natural Gas Demand Outlook
?15 OCT 1.981 25X1
If the West Europeans made the decision to do so, their gas requirements for
at least the 1980s could be net without importing additional Soviet gas. The main
reason is that rising gas prices are depressing demand well below what the West
Europeans had expected. Moreover, new gas supplies outside Europe will be caning
on stream both to offset possible declines in domestic production and to meet
future growth in gas needs.
Gas Demand Outlook
The six nations negotiating for Soviet gas are officially projecting gas
requirements of 3.6 million b/d oil equivalent in 1990, campared with about 3.0
million b/d oil equivalent last year.
? West Germany, the Netherlands, and Italy would need little
if any additional gas fran the USSR or elsewhere given
anticipated levels of domestic production and firm import
contracts.
? France, Belgium, and Austria would need to contract for
some additional gas supplies from the USSR or other sources,
but only if these official'demand projections prove correct.
Demand, however, will be far less than the official forecasts indicate.
? Gas use fell four percent in 1980 with the largest declines
occurring in Germany and the Netherlands; demand has fallen
again this year.
? Sluggish economic growth and the sharp rise in gas prices
have been responsible for the drop.
? All of the decline has occurred in the industrial and electricity
generating sectors, residential use was stagnant.
The decline has led to major downward revisions in private forecasts of
future requirements.
The reductions in forecasted gas needs--200,000 b/d oil equivalent
or more--is equal to at least 40 percent of the volume of
incremental Soviet gas supplies.
? Given the lagged effect of price increases on energy use,
further reductions in energy and gas requirements will
probably occur, particularly if gas prices continue
to increase more rapidly than prices for other fuels.
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CONFIDENTIAL
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 Approved For Release 20Qc7dR1?jB-DP84B00049R001503700009-2
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Gas Supplies
Although European domestic gas supplies are limited,
domestic production is still expected to account for almost 60
percent of gas needs during the 1980s even without major policy
changes in the Netherlands, Norway, or the United Kingdom.
o The Dutch, who supply the bulk of present European gas
needs, are not renewing contracts as they expire,
arguing that they will need their limited gas resources
for future domestic needs. Dutch gas reserves -- some
62 trillion cubic feet -- have increased slightly over
the past 2 to 3 years, but the Hague has not yet
altered its long-term strategy.
o Present UK policy to use North Sea gas at home seems
unlikely to change.
o Norway has 43 trillion cubic feet of gas but Oslo's
present development plans will not yield a major
increase in supplies during the decade. Some of the
largest fields are extremely remote and will only be
available during the 1990s after a lengthy and
expensive development program.
While domestic gas is limited, there is substantial
potential in other areas for increased supplies.
o Algeria offers the greatest potential and indeed, could
provide as much additional gas as the proposed Soviet
line. Europeans are concerned about Algerian demands
for excessively high prices and question Algiers'
reliability as a supplier. We expect Algeria to soften
its hard-line pricing stance as the need for gas
revenue increases, however.
o Nigeria has contracted to sell 130,000 b/d oil
equivalent to Western Europe and could double this
volume by 1990 if planned sales to the US market fall
through.
o Cameroon probably will be exporting as much as 130,000
b/d oil equivalent by the late 1980s.
o Canada, Trinidad and Tobago, and Qatar are also
potential sources of liquefied natural gas (LNG) late
in the decade.
Taken together, these potential supplies are more than sufficient
to meet European gas needs without additional Soviet gas -- even
under the relatively high demand projections now being used by
the Europeans.
CONFIDENTIAL
Approved For Release 2007/04/23: CIA-RDP84B00049R001503700009-2