Global gas and Russia

Transcription

1 Global gas and Russia Dr. Tatiana Mitrova Research Scholar, Center on Global Energy Policy (Columbia University) Head of Oil and Gas Department, Energy Research Institute of the Russian Academy of Sciences Madrid November 25, 216

2 Gas demand is expected to increase globally, supply will be mainly provided by conventional gas resources Gas supply-demand balance by the region and by the type of supply source, Probable Scenario Consumption in 21 OECD China India Middle East Africa Other non-oecd Production in 21 Operational fields New fields Shale gas CBM Offshore (USA) Coal-to-gas (China) Biogas Source: Global and Russian Energy Outlook-216, ERI RAS-AC 1 1

3 By 24 the share of LNG in the global gas trade will increase up to 6% Global net-export of LNG and pipeline gas Global liquefaction capacities addition (compared to 215) by the region 16 7 % % 5 % 4 % 3 % 2 % 1 % % Net LNG export Probable Scenario Crit. Sc. Fav. Sc. Net pipeline gas export North America CIS OECD Asia Non-OECD Asia Middle East Africa Source: Global and Russian Energy Outlook-216, ERI RAS-AC 2

4 Global gas trade is moving to Asia Pipeline gas and LNG export and import by the main countries, Probable Scenario 4 2 Russia USA Non-specified Africa Middle East Europe India China Japan Non-OECD Asia OECD Asia CIS Europe 2 1 Australia Source: 3 Global and Russian Energy Outlook-216, ERI RAS-AC 3

5 Status quo: Russian gas production and exports are stagnating Monthly gas production in Russia in , Russian gas export dynamics by destination in 2-215, January February March April May June Sources: Rosstat, CDU TEK July August September October November December CIS Europe Asia 4

6 Increasing gas bubble in the domestic market Company Production in 215, Unutilized potential and capacities additions under development by 22, Gazprom 46 ~155 Novatek 52 ~48 Rosneft 42 ~48 VIOCs (APG) 46 ~15 TOTAL 635,5 266 Rosneft and Novatek have extremely ambitious plans on gas production expansion, obligatory utilization of the associated petroleum gas (APG) and its priority pipeline access stimulate VIOCs gas output growth Gazprom is looking for the external markets 5

7 European gas market is strongly over-contracted and locked in the TOP contracts, it is very difficult to expand market share European* gas balance ACQ pipeline gas ACQ LNG MCQ pipeline gas MCQ LNG Indigenous production Demand range Demand * Europe-41 without Turkey Source: ERI RAS 6

8 Russia has the largest contract portfolio, which guarantees at least 115 a of exports up to 223 Russia Norway Over TOP TOP Algeria Supplies in the Baseline scenario Qatar 7

9 Russia is well placed to defend its market share on the European gas market if needed Long run marginal supply costs to Europe (Russian pipeline gas and US LNG) Short run marginal costs to Europe (Russian pipeline gas and US LNG) 8 Regas 8 Regas 7 LNG transportation 7 LNG transportation 6 Liquefaction 6 Export duty Export duty Nord Stream transportation Transportation to the Russian border 15% Henry Hub Nord Stream transportation Transportation to the Russian border 15% Henry Hub 1 Henry Hub 1 Henry Hub West Siberia- Europe US LNG-Europe Production (incuding taxes) West Siberia- Europe US LNG-Europe Production (incuding taxes) 8

10 Conclusions Dominant position of the Russian gas in Europe is fixed by the LTCs. The EU wants to diversify away from Russia, but there are few alternatives and the EU knows that (limited gas volumes are available through the Southern Corridor, frozen production in Netherlands, limited capability by Norway to increase production, stagnating production in North Africa). The next fight for EU gas market share will therefore be a fight between Russian gas and LNG (first of all US LNG). If Russian gas will be threatened, Russia will no longer fight for high gas prices (as in 29), but for market share, even if this means low prices. Compared to most of its new competitors, Russia has a lower cost gas supply base and can thus engage on a price war if needed. Nevertheless Russia would prefer to avoid price war with the US and Qatar LNG in order to maintain export revenues. 9