‘A whole new chapter’ for Russia in the gas industry

Russia-China pipeline comment:

Warwick Business School Professor Michael Bradshaw said: “It is not inconceivable that as Russia’s role in Europe’s gas market stagnates over the coming decade, this role will be matched, if not exceeded, by the rising share of Russian gas exports to the east. After all, if 90% of future gas demand growth between now and 2050 is to be in Asia, the current deal should mark the beginning of a whole new chapter in the story of Russia’s role in the global gas industry.

“With this agreement Russia expects exports of gas to the Asia-Pacific region to rise from 6% to 31% by 2035.

“The deal has been more than a decade in the making and the volume of gas is less than that stipulated in previous intergovernmental agreements. The agreement is to deliver 38 billion m3/yr of gas by pipeline to China beginning at the end of this decade (2018 - 2020).

“The gas fields in Chayanda will not be connected to the pipeline system that moves gas west to Europe, as China did not want to find themselves vying with Russia’s European customers for the same gas from West Siberia.

“Gazprom, who will solely supply the gas, faces a stagnant and falling market in Europe and Russia actually has a surplus of gas to meet domestic demands and exports to Europe. None of this, though, has happened overnight, and it would be wrong to paint Russia’s eastern interests as a new project that has been undertaken in response to developments in Europe.”

Edited by Elizabeth Corner

Read the article online at: https://www.worldpipelines.com/business-news/02092014/a-whole-new-chapter-for-russia-in-the-gas-industry/