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Development of European Gas Supply and Demand and Prospects for Gas Use in Power Generation

Demand for natural gas in Europe is expected to grow rapidly, particularly for use in power generation, as a result of technological developments and regulatory action to protect the environment. While there is no shortage of gas reserves to meet this potential demand, there is uncertainty over how rapidly such reserves can be developed and marketed, and at what level of cost. It seems probable that incremental gas supplies will be available only at higher prices than those being paid today, as a result of rising gas supply costs. However, it would appear that gas prices can rise further before other fuels become more commercially attractive in the power generation sector.