Russian Energy Ministry expects Russian gas exports to Europe to rise by 37.8% by 2015 but sees gas supplies to China little attractive in the current market conditions, the ministry said on Monday.
In its General Scheme of Gas Sector Development through 2030 document, the ministry set forecasts for gas exports to Europe at 165 billion cubic meters (bcm) in 2009 compared to 161 bcm expected this year. The supplies are expected to further grow to 219-222 bcm by 2015 and 220-227 by 2030, said the document.
Russian gas export monopoly Gazprom, the world’s largest gas producer, supplies 26% of European gas, selling the fuel to 22 European countries. Gazprom’s main consumers in Europe include Germany, Italy, France and Turkey. The energy ministry’s plan showed that total Russian gas exports, which also include gas supplies to Asia and former Soviet countries, are expected to amount to 261 bcm in 2009, 347-375 bcm in 2015 and 415-440 bcm in 2030. This year, total Russian gas exports are set at 249 bcm.
The International Energy Agency has predicted that global demand for natural gas will grow by 2.3% annually and will increase by 90% by 2030 from the current level. The energy ministry expects gas demand in Russia to grow by 10% by 2015 to 465-485 bcm. To meet the growing demand, Russia plans to increase gas production to 781-845 bcm by 2015 and 876-981 bcm by 2030 from the 678 bcm expected this year. But it also plans long-term imports of 70 bcm of gas a year from the Central Asian countries of Turkmenistan, Uzbekistan and Kazakhstan, said the plan.
EXPORT TO CHINA UNCERTAIN
The ministry said that Russia sees little incentives in natural gas supplies to China, which the two countries have been discussing for several years, after China agreed to export Turkmenistan’s gas, which is going to be cheaper given shorter delivery distance. “At the moment, China is lacking economic fundamentals that would allow gas to be sold on market conditions and ensure efficiency and competitiveness of Russian gas supplies,” said the document. But the ministry said Russia may return to earlier plans to build a 6,000 km gas pipeline to China if market conditions improve and Russia achieves attractive price agreement with China.
Gazprom has agreed to build two pipelines to China and supply up to 80 billion cubic meters when the links reach their peak capacity, but talks have been slow as the two sides struggle to agree on the price of future deliveries. Last month, Russia agreed to supply 10 bcm per year of natural gas to South Korea for 30 years after 2015 through a pipeline to be built from eastern Siberia to the South Korea via the North Korea. The energy ministry plan said that Russian natural gas supplies to China and Korea may amount to 25-50 bcm per year from 2020. (Reuters)