Europe faces more dependency on Russian gas - study

FRANKFURT Jan 14 (Reuters) - Europe must look hard for alternatives to Russian gas as growing demand deepens its dependency on outside suppliers, a summary of a study from the A.T. Kearney consultancy said on Wednesday.

"Europe's annual gas import demand will rise by nearly 70 percent to 515 billion cubic metres (bcm) to 2020," said Kearney analyst Florian Haslauer, the study's lead author, citing diminishing domestic resources and rising demand.

"If Russia does not expand its exploration capacities, there will be supply bottlenecks in the coming years," he said.

The problem would be exacerbated by growing internal Russian gas consumption, he added.

Apart from looking for alternatives, Europe, which buys a quarter of its gas from Russia, needed to focus on more underground storage and renewable energy, the study also said.

EU member states have stepped up gas consumption especially in power generation to complement nuclear, which has been seen as risky, and coal, which can cause heavy carbon pollution.

Gas usage in power generation in the EU-27 increased by 32 percent to 182.7 bcm in 2007 over 140.1 bcm in 2000, and is set to rise to 247.1 bcm by 2020, as more capacity is due to be installed, figures released by A.T. Kearney showed.

As Europe is also likely to fall behind in building enough pipelines to account for increasing import volumes fast enough, it needs to expand facilities to bring in liquefied natural gas (LNG) on tankers, the study also said.

It predicted that the EU's LNG imports would more than treble to 168.0 bcm in 2020 from 47.7 bcm in 2005.

The study said that Europe needed to agree new long-term contracts with North African countries and the Middle East.

It also recommended a coordination council to monitor gas stream data, to prevent future bottlenecks early on, and an energy partnership with Ukraine to improve its energy efficiency and facilitate foreign stakes in its transport system.

(Reporting by Vera Eckert)