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Gas and LNG are key for global decarbonisation

Sep 11, 2018
5 min read
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ENAGÁS CEO, Marcelino Oreja, looks to the future of the industry across the world and highlights how business can grow whilst also acting to reduce emissions

The outlook for gas looks bright according to the prediction of the main international bodies across the industry. World Energy Outlook 2017 published by the International Energy Agency (IEA) predicts in its most ambitious environmental scenario that “the consumption of natural gas rises by almost 20 per cent by 2030 and remains globally at that level until 2040.” In the case of LNG, trading is growing, driven by the new liquefaction capacity in the U.S. and Australia, regasification growth in new non-OECD markets and a greater proportion of floating solutions.

DRIVING BUSINESS FORWARD

Over the course of our almost 50-year history, Enagás has developed the key infrastructures for the Spanish Gas System, transforming it into a benchmark for security and diversification of supply. Now, we are exporting all this knowledge to other regions, with an international expansion process that began in 2011 and saw us enter eight countries. Enagás is in Mexico, Chile, Peru, Sweden, Greece, Italy and Albania.

Currently, our priority is to consolidate our position in the assets and markets in which the company already has a presence. We will continue to focus on Latin America and also in Europe, where we are certified as a transmission system operator by the EU and where we can contribute to promote a real Energy Union.

Regarding the LNG industry, Enagás is the company with the most regasification terminals in the world (eight in total). Nowadays, we are working on adapting the Spanish terminals to provide logistics services, as reloading operations.

Furthermore, we are coordinating CORE LNG as hive, a project to boost the use of LNG as a sustainable fuel in the transport sector.

NEW GROWTH SPOTS

Enagás, as a midstream player, follows upstream developments as possible opportunities for infrastructure developments. Nowadays, a key country is the U.S., which has become a gas exporter. Among other factors, this is causing larger volumes of natural gas.

LNG infrastructures allowing ship storage and reloading in transit to their final destination are needed to respond to that abundance. In this context, Spain plays a fundamental role due to its strength in LNG terminals.

One of our most important current projects is the construction of the Trans Adriatic Pipeline (TAP), a key infrastructure to the European security supply that is making big progress.

It is now two-thirds completed, so we are confident that it will be operational in early 2020.

In addition, in April 2018 the Snam, Fluxys and Enagás consortium was awarded the tender for the purchase of a 66 per cent stake in DESFA, the Greek gas operator.

The signing of the agreements is still subject to the completion of the further steps envisaged by the tender procedure and by local legislation on privatisation. DESFA is strategic for us because it is the gas operator in Greece, a key country in TAP development.

Greece is also valuable as an important crossroads for the diversification of supplies and the opening of new natural gas routes in Europe. In June 2018, Enagás, Elecnor and Fomento signed an agreement with Sound Energy, the Moroccan focused upstream gas company, for the front end engineering and design of a pipeline and a central processing facility in eastern Morocco.

DRIVE TOWARDS LOW-CARBON

Gas is essential in the decarbonisation process, allowing renewable energy sources to be integrated into our energy system and enabling a cost-efficient transition, while simultaneously providing Europe’s energy system.

One of the areas where gas can be a key player is transportation. For example, LNG is the only down-to-earth alternative to improve air quality in the maritime sector. Gas engines on ships reduce NOx emissions by around 85-90 per cent, CO2 emissions between 25-30 per cent and SOx and particulates by almost 100 per cent compared to traditional fuels.

Furthermore, the current gas infrastructure is already prepared to operate in a low carbon model, as it is able to transport natural gas and, also renewable gas (hydrogen, biomethane, etc). According to a study published by the Gas for Climate initiative, using renewable gas in existing gas infrastructure could play an important role in reducing Europe’s greenhouse gas emissions to net-zero by mid-century and could save about €140 billion annually by 2050 compared to a future energy system without any gas.

IMPORTANCE OF GASTECH

Gastech is the world’s benchmark event in the gas sector, so it is always an important appointment in our agenda. This edition is even more important for us, because it is held in our country. To be one of the host companies is a pleasure and a responsibility as well.

To have a consortium is a great opportunity to collaborate, to learn and to share knowledge and experiences with other leading gas companies and associations.

All of us are already working in partnership in order to support the event and ensure its success. It has been an enriching experience so far.

Gastech is an international showcase. It is an occasion for today’s Enagás to be known.

After almost 50-years’ experience, Enagás has been able to place itself at the forefront of innovation. We would like to share with the public the innovative projects that we are carrying out to contribute to the decarbonisation process.

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