Gas infrastructure is vital to the proper working of the gas system. Without the right infrastructure in place, natural gas would not find its way from the source to the consumer. Many policy instruments influence the investments in and working of the gas infrastructure; Energy Delta Institute provides information to help people remain up to date on new regulations, new technological opportunities and the contribution of new methods of collaboration. An introduction to gas infrastructure is provided below, and additional resources include:
- A selection of "Top Gas Infrastructure Papers"
- For a more extensive list of papers, see our publication database
- A Wiki on various aspects of energy infrastructures
An Introduction to Gas Infrastructure
There is sufficient natural gas in the world. According to the International Energy Agency, conventional gas reserves are sufficient to sustain global gas consumption at current levels for another 120 years. This gas, however, must be brought to the market. This can be done via pipelines or shipment of Liquefied Natural Gas (LNG). There are a lot of large gas infrastructure projects underway. Sizeable pipelines like South Stream, Nabucco and TAP are on the planning table, whereas Nord Stream (second leg is under construction) and the Central Asia – China gas pipeline recently came on stream. With respect to LNG, Qatar has significantly expanded its liquefaction capacity recently whereas Australia has a lot of LNG liquefaction projects planned.
There are several issues related to gas infrastructure. One of the main issues is network access. In the EU, this is assured by third party access rule. This implies that network operators should provide access to their infrastructure on a non-discriminatory basis. However, there are exemptions to this rule. An important reason to grant an exemption is if the investment would only occur if the TPA rule will not apply. Practice shows that the exemptions are heavily debated.
Another issue is the unbundling process. Under the Third Energy Package, the energy companies are stipulated to adopt a form of unbundling to separate the gas transmission grid from the up- and downstream activities. There are degrees of freedom which form of unbundling is chosen, which results in different situations on the national markets. However, the European Commission is determined to continue on the path set by the Energy Package to create an internal market for energy.
One of the regulatory issues that is under debate at present is the number and size of the entry-exit systems in the gas grid. Is the size linked to a virtual hub or should there be entry-exit systems between the hubs as extra balancing zones? Should there be taken special measures on market coupling? To what extend will this make arbitration possible to provide for the liquidity in the market? All these issues are being discussed under the name of Target Model.