Growth in gas demand in OECD Europe in the same period is expected to be 1.0% per annum. This translates into a demand for gas in OECD Europe in 2030 of approximately 694 bcm - up from the current level of some 550 bcm.

The share of gas in total primary energy consumption is approaching 25% in the OECD countries in Europe, and is expected to reach almost 30% in 2030. Approximately 60% of the growth in gas consumption in the period is expected to come from the electricity sector. The IEA expects continued growth in demand for all sub-sectors of the European natural gas market.

We market and sell our gas together with the Norwegian State's natural gas. We are the second largest gas supplier in Europe and the sixth largest supplier in the world. Furthermore, we market gas sourced from producing areas other than the NCS. Other major gas suppliers in Europe are Gazprom in Russia, Sonatrach in Algeria and Gasunie in the Netherlands.

We believe that the Norwegian natural gas exports will remain highly competitive due to their reliability, access to the transportation infrastructure and proximity to key European markets such as the UK, Germany and France. In addition, natural gas is an attractive source of energy from an environmental perspective since it emits far less CO2 than coal and oil.

For a long time, the UK was the second largest producer of natural gas in Europe after Russia. However, by 2016 it is expected that the UK may be dependent on imports for approximately 80% of its gas requirements. Based on our growing infrastructure, we believe we are well positioned to supply a portion of the UK's additional demand for imported natural gas and to become more involved in the UK market - Europe's largest and most liberalised natural gas market.

Langeled, a new export pipeline, was put into operation in 2007, connecting the NCS to Easington in the UK. Another new infrastructure project called the Tampen Link, a pipeline from the Statfjord field on the NCS to the existing Flags pipeline on the UK continental shelf, was also completed in 2007.

The recent dispute between Russia and Ukraine regarding gas transit highlighted the importance of Russian gas supplies to European markets. In the years ahead, Russian supplies are expected to grow further, and in the longer term the EU is set to import some 80% of its natural gas. In order to diversify supplies, European countries and companies are actively seeking to establish alternative supply solutions, mainly through LNG, but also by establishing new pipeline infrastructure from the Caspian region and from North Africa.

We believe that Europe will need additional sources of natural gas. We are participating in increasing gas production in Azerbaijan, with the Shah Deniz field in the Caspian Sea as a key asset. Gas is already exported from Azerbaijan to Georgia and Turkey via the South Caucasus Pipeline (SCP). In order to bring gas even further west, we are participating in the Trans-Adriatic Pipeline (TAP) that will connect the Italian market with gas flowing westwards from Turkey, through Greece and Albania.

As the European energy market undergoes deregulation and structural changes, we believe that natural gas will play an increasingly important role. This trend will be reinforced by additional steps in Europe to curb carbon dioxide emissions, in particular by the use of carbon pricing mechanisms such as the EU Emission Trading Scheme. We expect the use of natural gas as a source of electricity generation to continue to grow, as there is a need to replace even more coal-based generation capacity with natural gas. Deregulation creates new opportunities and business models in the gas sector, both with regard to added values through efficiency gains and to building a more substantial end user sales portfolio. The integration of the gas and power markets also presents us with new business opportunities in trading and as a means of increasing the value of gas by upgrading through generation and improving our flexibility in market operations. We therefore aim to manage and further develop marketed volumes, and to increase the scale and scope of our trading, optimisation and midstream and downstream activities.