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Main page > Products > Special reports > Liquefied Natural Gas Outlook: Expectations and Reality
Liquefied Natural Gas Outlook: Expectations and Reality
World market has shown interest to liquefied gas in the past several years. Production technologies are being improved, which leads to cheaper costs, including LNG transportation costs. Liquefied gas is becoming a real competitor for pipeline gas. Demand for LNG is growing as offshore gas production is speeding up and the distance from extraction sites to end consumer markets is increasing. Many talk of a fundamentally new page in the history of gas industry development.
Russia has so far been aside of the global trend. Traditionally we have relied on pipeline exports, therefore LNG has been a wonder for Russia for a long time. One of the reasons is technological backwardness. Russia is the largest exporter of natural gas but still does not have own liquefying facilities. This cramps its role in the world gas market that is currently dominated by Europe and former Soviet republics.
However, right now we are witnessing attempts to catch up with the global trend. Producers have announced several large LNG projects. But what are their real abilities? The new study by the National Energy Security Fund will help interested readers investigate this delicate subject and understand what is in store for LNG production and export in the nearest years.
The study dwells on the following subjects:
- LNG projects outlook in Russia from the standpoint of resource base, potential access to new trade markets, cost of plants and their political feasibility. Analysis of the proposed Baltic LNG Plant, Sakhalin-2, LNG production opportunities in the framework of the Shtokman project.
- Gazprom's strategy in the LNG sphere. Official plans and real potential. Supporters and opponents of LNG industry development among Gazprom's top managers.
- Government's attitude toward the development of liquefied gas in Russia.
- Governmental regulation of LNG production. Laws regulating LNG export.
- Possible cooperation with foreign companies. Partners selection criteria: who and why will get access to LNG production in Russia.
The content of the report:
| Index | 2 |
| Introduction | 4 |
| Chapter 1. Gazprom's strategy developing production and exports of liquefied natural gas | 5 |
| 1.1. The history of Gazprom's approach to LNG | 5 |
| 1.2. Conflict of interests of the production and export groups inside Gazprom | 10 |
| 1.3. Liquefied gas for domestic use | 11 |
| Chapter 2. LNG as a harmonic component of Gazprom's energy strategy | 12 |
| 2.1. LNG and pipeline gas: complementarity, not competition | 12 |
| 2.2. Dynamics of LNG market. Demand and supply | 13 |
| 2.3. Risks and problems of LNG development | 17 |
| 2.4. Pricing and risk management in LNG projects | 18 |
| 2.5. Lawmaking in the LNG segment | 20 |
| Chapter 3. Main Russian LNG projects | 21 |
| 3.1. Sakhalin-2 | 21 |
| 3.2. Shtokman LNG | 24 |
| 3.3. Baltic LNG | 27 |
| 3.4. Yamal-LNG: unsuccessful attempt to launch independent LNG exports project | 28 |
| Chapter 4. LNG and «Gas OPEC» (OGEC). Geopolitical aspects of global LNG market development | 30 |
| 4.1. Gas exporting countries forum and possibility of an OGEC on its platform | 31 |
| 4.2. Interests of exporting countries and risks for Russia in case a cartel is organized | 35 |
| Chapter 5. Foreign participants in LNG projects in Russia | 37 |
| 5.1. Shell Gas & Power | 37 |
| 5.2. Mitsui | 49 |
| 5.3. Mitsubishi Corp | 49 |
| 5.4. Total | 40 |
| 5.4. StatoilHydro | 40 |
| Chapter 6. Offshore potential of Russia and outlook of global gas market | 42 |
| Main conclusions | 46 |
| Date of issue | March 11, 2008 |
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National Energy Security Fund © 2007