Europe's soaring energy needs to be met by Libyan expansion

Gas production to be increased as Europe looks to import more

ROME // Libya has big plans to expand its gas production, which could prove a boon for European countries. "By 2025, the EU will need to find more than 300 billion cubic metres [a year] of extra gas to import," Paolo Scaroni, the chief executive of the Italian energy conglomerate Eni, told the Libya Gas conference in Rome yesterday.

Significant demand would come as older European coal-fired and nuclear power plants were replaced with facilities running on natural gas, Mr Scaroni said. European gas production was expected to fall. The EU is likely to seek more of the fuel from Libya and other North African producers to meet growing gas needs as it also tries to reduce dependence on Russian imports. But the domestic gas requirements of those countries are also expected to rise.

Libya is now using more than half of its 3.9 million cubic metres a year of gas production domestically, mainly in its power and petrochemical sectors, said Shokri Ghanem, the chairman of the state-owned National Oil Company (NOC). "Our policy is to continue to supply the local market," Mr Ghanem said. "Our gas market is going to take a new shape." Ahmed Oun, the deputy general manager of the Libyan unit of Royal Dutch Shell, predicted gas demand in MENA countries, including Libya, would rise by 5 per cent annually in coming years, similar to demand growth projected for China. Global gas demand was expected to rise at a more moderate 2 per cent a year.

Despite that, Mr Ghanem said Libya would continue to have surplus gas for export but would need more international investment to expand its production capacity. He said to help facilitate expansion, Tripoli would soon pass a new hydrocarbon law to cover gas and oil development. The current law, dating from 1955, only covered oil. Mr Scaroni said Eni planned to invest US$28 billion (Dh102.84bn) in Libyan oil and gas development in the next 10 years.

Abdulgasem Shengher, the general manager for exploration and production of NOC, said Libya planned to raise output from its onshore and offshore gasfields, and new fields. Mr Shengher estimated Libya's gas reserves at 60 trillion cubic feet (cu ft), or 1.7 trillion cubic metres. [e-mail]