The history of natural gas as an industrial resource in Western Europe began in 1959 with the discovery of the Groningen field in the Netherlands, followed a few years later by the first discoveries in the UK sector of the North Sea.
Gas reserves far bigger than the domestic market could absorb were found off the Norwegian coast in 1970, prompting Norway to build pipelines exporting gas to both Continental Europe and the UK.
Russia's rise to the top among gas exporters
While the former Soviet Union had been exporting very small quantities of gas to Poland as far back as the end of the 1940s, the idea of large-scale exports to Western Europe was regarded as unworkable on both political and technical grounds. The focus of Soviet natural gas production was moving from the Volga/Urals, North Caucasus and Ukraine to Siberia, several thousand kilometres to the northeast.
The major challenges posed by transporting gas over such a distance were not overcome until the 1970s, when a pipeline was constructed which ran from Siberia to the Ukraine in connection with the development of Siberian reserves, especially the vast fields of Medvezhe, Urengoy and Yamburg.
Between 1970 and 1980, deliveries of Soviet gas to Western Europe increased sharply from 3.4 BCM to 26 BCM a year. By 1990, total gas exports had risen to 109 BCM, and Western Europe, with 63 BCM of imports, was the largest buyer of Soviet gas.
The Transmediterranean Pipeline from Algeria through Tunisia to Sicily, which began operating in 1983, was the first to transport North African gas to Europe. It was followed in 1996 by the GME Pipeline from Algeria through Morocco to Spain and Portugal. The capacity of the Transmediterranean line has since been increased substantially, bringing Algerian exports to Europe close to 35 BCM in 2003. GME capacity will be stepped up in the near future too.
Energy dialogue between the EU and Russia
The foundations of Russia's gas export business were laid during the Cold War. The trade was able to develop despite political opposition, partly because the governments of Western Europe believed it could be a force for peace, partnership and prosperity.
The success story of the first Soviet and then Russian gas deliveries to Europe was another reason. With the passing of the Cold War, the European Commission proposed an "energy dialogue" with Russia. This agreement created a high-level channel of communication for resolving disagreements between the two sides, for example over destination clauses in natural gas contracts. Within the framework of the dialogue, the EU has agreed to recognise certain Russian gas projects as "energy infrastructure projects of common interest". These include the North European Pipeline, for which the EU is cofinancing a feasibility study, the Yamal Pipeline, the Shtokman gas field and the Druzhba-Adria oil pipeline link.