12/01/20101

“CENTRAL EUROPEAN COUNTRIES

– NATURAL GAS SUPPLIES SECURITY”

By

Datuk (Dr) Abdul Rahim HashimPresident, International Gas Union (IGU)

President, Malaysian Gas Association (MGA)

24th to 25th November, 2009Bratislava, Slovak Republic

“CENTRAL EUROPEAN GAS CONGRESS” Organised by Slovak Gas and Oil Association

(4th to 8th June, 2012)

12/01/20102

Contents

1. Brief on IGU Structure

2. Third Energy Package of the European Commission

3. Issues of Natural Gas Supplies Security and Safety

4. Diversification of Gas Sources and Transmission

5. Co-operation of the Central European Countries

6. Concluding Remarks

12/01/20103

1. Brief on IGU Structure

12/01/20104

IGU as THE spokesperson for the gas industry

• World wide and non–profit organisation since 1931

• Promotes technical and economic progress of the gas industry

• Emphasising sound environmental performance

• Increased focus on strategic and policy issues

• Cooperation with IEA, United Nations, World Bank, IEF and others

12/01/20105

IGU Members responsible for 95% of Global Gas Sales

75 Charter members

35 Associate members

10 Affiliated members

12/01/20106

IGU Organisation Chart for Malaysian 2009 – 2012 Triennium

12/01/20107

IGU Messages on Natural Gas

• Clean, efficient, versatile and environmental friendly

• Available and abundant

• Continue to play a substantial role in global energy demand

• Basis for sustainable economic growth

Natural gas

– major part of the long term energy solution

12/01/20108

The THEME of Malaysian IGU

Presidency for 2009 – 2012 Triennium

“GAS : SUSTAINING FUTURE GLOBAL GROWTH”

• Gas plays a vital role in meeting the world‟s expanding energy needs,

while helping to cut greenhouse gas emissions.

• The challenges facing the industry include:

Continue to position gas as the fuel of choice

Maximise value from the depleting resource

Provide for future sustainability from the economic, social,

technical and environmental aspects in order to contribute

to global economic growth.

12/01/20109

2. Third Energy Package of the European Commission

12/01/201010

Third Energy Package of the European Commission

• To create more choices, investment and security of

energy supply.

• Competitiveness of market vis-à-vis “unbundling”

• Separation of gas value chain activities and

electricity networks

a) Full ownership unbundling

b) The independent system operator (ISO); or

c) The independent transmission operator (ITO)

12/01/201011

3. Issues of Natural Gas Supplies Security and Safety

12/01/201012

Global and Regional Gas Reserves and Supply-Demand Balance

• Middle East, Russia & CIS and Africa emerge as primary gas sources for future

• Europe and Asia Pacific to depend on these sources for security of gas supply

0

200

400

600

800

1,000

1,200

1985 1995 2005 2015 2025

North America

8.87

Latin America

7.31

Europe

6.12

Africa

14.55

Middle East

75.91

Russia & CIS

56.78

Asia-Pacific

15.39

Gas Reserves (Tcm) Gas Demand Gas SupplySources: OECD/IEA - 2009

12/01/201013

Proven Gas Reserves by Countries

0.920.981.091.201.391.541.581.631.781.822.172.392.462.512.913.173.18

4.504.845.21

6.436.73

7.577.94

25.4629.61

43.30

0 10 20 30 40 50

UkraineOman

IndiaAzerbaijan

NetherlandsLibya

UzbekistanCanadaKuwait

KazakhstanEgypt

MalaysiaChina

AustraliaNorway

IraqIndonesia

AlgeriaVenezuela

NigeriaUAE

USSaudi Arabia

TurkmenistanQatar

IranRussian Fed.

Proven Gas Reserves in

Europe and Eurasia

World Proven Gas Reserves 185 Tcm

Proven Gas Reserves in

Europe & Eurasia regions

63 Tcm

Source of Data: BP, “Statistical Review of World Energy”, June 2009

12/01/201014

4. Diversification of Gas Sources and Transmission

12/01/201015

Diversification of Gas Sources and Transmission Routes

• Enhancing security of gas supply from diversification of gas supply sources

Reducing over-dependence from any single gas supply source.

12/01/201016

A global gas trade is evolving

• LNG has increased breadth and depth of global gas trade

12/01/201017

Building Gas Supply Highways, Hubs and Regional Co-operation to enhance security of gas supply to Europe

Source: IEA

12/01/201018

Nabucco Gas Pipeline: Connecting Caspian Region and West Asia with Europe

Trans-Caspian

Turkmen Gas

Egyptian Gas

Arab Gas P/L

Iraqi Gas

(ITGEP)

Nabucco

Arab Gas P/L

Phase-III TerGas

Blue

Stream-I

Nabucco

Trans-Caspian

Kazakh Gas

Iranian

Gas

Map: Google Map

Ukraine

Greece

Turkey

Russia Kazakhstan

Egypt

Austria

Caspian

Gas

Nabucco Gas Pipeline

Existing :Pipelines

{Planned Gas Pipeline

12/01/201019

5. Co-operation of the Central European Countries

12/01/201020

Co-operation of the Central European Countries

• The importance of inter-dependency on energy

- Gas producing and consuming countries

• To promote “energy cooperation”, “spirit of goodwill”, “positive

engagement,” and “win-win arrangement)

• Stable, geopolitically and economically conducive environments

12/01/201021

The Lisbon Treaty – signed and ratified by Czech Republic, Republic of Hungary, Republic of Poland and Slovak Republic

Poland

Slovak

Hungary

Czech

Status of Ratification:

Poland – 13 Oct 2009

Czech Republic – 13 Nov. 2009

Slovakia – 24 June 2008

Hungary – 6 Feb. 2008

Countries in EU where

the Lisbon Treaty has

been ratified

12/01/201022

6. Concluding Remarks

12/01/201023

Key Challenges: To secure, reliable, affordable energy services with minimal environmental impact

12/01/201024

The other challenge is to turn issues on natural gas supplies security and safety into new opportunities

• Many challenges facing the gas industry

• Financing gas infrastructure that are capital intensive

• Addressing issues relating to climate change

• Geo-politics

• Turn challenges into opportunities

• Forging Energy Co-operation and Dialogue at different

G-to-G; G-to-B and B-to-B levels to secure sources of

diversified gas supply;

• Leveraging on technology to enhance security of future gas

supply via commercialising non-conventional gas

resources

• Natural Gas will continue to be „fuel of choice‟ as be part of

the long-term energy solution

12/01/201025

“GAS – SUSTAINING FUTURE

GLOBAL GROWTH”

Kuala Lumpur Convention Centre

4 to 8 June, 2012

CHARMING COUNTRY, COLOURFUL CITY

25th World Gas Conference

12/01/201026

SEE YOU IN KUALA LUMPUR

25TH WORLD GAS CONFERENCE & EXHIBITION

4 to 8 JUNE. 2012

WWW.IGU.ORG WWW.WGC2012.COM