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Results of Pivot to the East in Oil and Gas Sector

Results of Pivot to the East in Oil and Gas Sector

The plan of the pivot to the East began to be implemented in the Russian oil and gas sector long before another worsening of relations with the West. The motives behind it were most pragmatic.

Consumption of oil and gas grew in Asia, and limited local reserves made it possible to forecast with confidence that Asian countries would top the list of importers of hydrocarbons. Meanwhile, Russia does have reserves of oil and gas in the East that could be monetised.

Also, Russian state monopolies and their contractors are pleased to develop new transport infrastructure – and eastern projects have given them ample opportunity.

More than four years of life under sanctions have showed that from a political point of view too, the pivot to the East has proved correct. So what are its actual results?

Detailed analysis is presented in the new report prepared by the National Energy Security Fund and answering the following questions:

  • What are the prospects of gas market growth in Asia?

    • Is there a place for Russia in it?
  • At what rates are resources being developed and infrastructure created for the beginning of gas supply to China by pipeline?

  • Should one expect the beginning of supply to China from the Urengoy cluster?

    • What are the pros and cons of the Power of Siberia 2 project?
    • What are the difficulties of negotiations with the Chinese?
  • What market do new LNG projects target?

    • How much liquefied gas will come to Asian countries from Yamal and Gyda?
  • What awaits the Sakhalin gas production centre

    • How will gas from Sakhalin-1 and new projects on the island’s shelf really be monetised?
  • In what way is the infrastructure being used that was created for oil export to the east?

  • What is the structure of oil supply to China?

  • Why has China never become a serious investor in the Russian upstream segment and a major shareholder in Rosneft?

  • Will the trend continue towards a decline in oil supply to Europe in favour of a dramatic growth of import into China?

Contents of the report: 

Introduction 3
Projects to Supply Gas from Russia to Asia 5
A brief overview of the gas market of China 5
A brief overview of the gas market of Japan and South Korea 13
The prospects of Russian LNG projects in the Asian market 16
Yamal LNG 19
Three ‘Arctic LNG’ Projects 28
Power of Siberia and Power of Siberia 2 Pipeline Projects 37
Sakhalin Gas Projects 46
Russia in Asian Oil Market 55
Russia in Asian Oil Market 55
Logistics of Russian Oil Supply to Asia and Rosneft Contracts 58
Reorientation of Oil Supply from West to East 65
China as Investor in Russian projects 69
Medium-term Forecast of Developments 75
Date of release: December 18, 2018

If you are interested to obtain please contact » Elena Kim

Other issues:
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Analytical series “The Fuel and Energy Complex of Russia”:

Outlook for Russian LNG Industry
Russian Energy and West One Year after Ukraine Conflict Began: Are There Connections Still?
Green Agenda in Russia during Bitter Conflict with West
After February 2022 the agenda was radically rewritten. Western companies began leaving Russia en masse, economic relations with the West were drastically reduced, and the Russian economy began to be pushed violently from the global economic space, hemmed in by sweeping sanctions. All that was, to put it mildly, not the best background for talking about ESG. Especially because tasks of survival and stability under unprecedented pressure became the priority in the economy. In late 2022, however, attempts to reanimate the ESG agenda already became obvious. The message is put across insistently that it is important to Russia regardless of the foreign policy situation. While earlier the “green pivot” was seen as an opportunity to attract Western investors and their technological solutions to Russia, now Keynesian reliance on domestic manufacture is discussed.
Oil and Gas Sector Regulation in 2022 and Prospects for 2023
Gazprom at the Forefront of Economic and Political Battles with Europe
Gazprom is being actively thrown out of the market. Its annual supplies to Europe have shrunk from the previous 150 billion to 65 billion cubic metres of gas. European officials assure that they have already learnt how to live without Russian gas, so they will bring its purchases down to but nominal values in 2023. Their main hope is liquefied natural gas. Today the EU must make a crucial decision: whether it has passed the point of no return in gas business with Russia and whether it is certain that its economy will endure without supplies of Russian pipeline gas. Or, on the contrary, Europe will realise after all that the gas balance will not be achieved and the payment for so headlong a rush for LNG will be disproportionate. Assessment of the potential volume of LNG that will appear on the market before the end of the current decade will be the most important factor for making the decision.

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

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