INTERVIEW-CERA's Yergin sees world oil price easing

SOUTH STREAM

Russia's newly announced South Stream project will not affect other gas pipelines planned for the region as the amount of natural gas consumption in Europe is expected to skyrocket in coming years, Yergin said.

"Europe is going to be a big market for natural gas, so the South Stream does not preempt other natural gas contracts," he said.

Kazakh and Turkmen gas will also find its way to European markets, he added, as Central Asia joins the Middle East, Western Africa and Russia to be one of the largest energy producers in the world.

"Turkmenistan is back in the game, and the question is where the resources are going," he said, adding that Kazakhstan has expressed that it wants pipelines going in all directions out of the country.

Central Asia, among more traditional producers, will be focusing on growth in China and India as fast-growing Asian economic powerhouses continue to affect demand on the world energy markets.

In 2004, the consumption growth of China and India grew by 2.5 percent, Yergin said.

"The China factor still looms large and it's making people rethink the impact of China on the world market. China is less than 10 percent of the total demand but it's growing fast," Yergin said.