Current Trends: Home Market as an Alternative to Export?
Decreasing of Russian oil export, increasing of Russian gas export
140 120 100 80 2007 (January-June) 2008 (January-June) 60 40 20 0 Export of Oil (mln tons) Export of Gas (bcm) Source: Ministry of Energy
Different Ways of Oil and Gas Export?
The first half of the year, 2008:
- Export of gas 13,9%
- Export of gas to West Europe 22,2%
- Export to CIS and Baltic States 5,5% Export of oil 5%
- Oil and Gas – two different markets. It’s much more easy to find an alternative supplier of oil
- Czech precedent
- “Oil Traders War”
- Possibility of import substitution for EU: “yes” for oil, “no” for gas
- Oil Market in Europe is much more competitive
- Strategy of Upstream cooperation vs. Strategy of searching of alternative supplies
Alternative Supplies after War in Georgia
- Increasing of political risks (Azerbaijan, Georgia, Turkey)
- High probability of military offensive in Iran
- Aggressive pitting of Russia and Europe
Forecasts of the EU-27 Natural Gas Consumption and Import and Russia’s Possible Supplies to the Region, Billion Cubic Metres:
2007 2015 2020 2030 IE ĹŃ ENI ĹŃ ENI IEA ĹŃ ENI IEA E.ON E.ON A Consump- 477 487 686 641 - 610 505 761 692 609 643 516 852 750 726 tion Produc- 186 129 125 180 - 134 115 100 170 120 116 85 85 90 85 tion Import 292 358 561 461 - 476 390 661 439 489 527 437 767 660 641 Difference in import - 67 270 169 - 184 98 369 147 197 235 145 475 368 349 from 2007 Import from 138 122 172 160 - 152 126 190 173 152 160 129 213 187 182 Russia (25%*) Difference 0 -16 34 22 - 15 -12 52 35 14 23 -9 75 50 44 from 2007 Import from 138 146 206 192 - 183 152 228 208 183 193 155 256 225 218 Russia (30%**) Difference 0 8 68 54 - 45 14 90 70 45 55 17 118 87 80 from 2007
* The estimation proceeds from the assumption that the ratio of Russian gas in total consumption will not exceed 25%
** The estimation proceeds from the assumption that the ratio of Russian gas in total consumption will not exceed 30%
Growth of Gas Export to West Europe (January-June 2008)
60% 50% 40% 30% 20% 10% 0% Germany France Italy Austria Finland
Growth of Gas Export to Central Europe (January-June 2008)
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Macedonia Hungary Slovenia Czechia Slovakia Poland
Source: Neftegazovaya Vertikal
Distribution of Russian Gas
700 613 600 517 467 500 2007y 400 2010y 300 2030y 227 154 166 200 122 91 93 98 79 100 50 55 9 0 0 Home Market Export to CIS Export to Export to USA Other and Baltic Europe and Asia
Source: Gazprom
No Alternative in Central Asia
30% 25,20% 25% 20% Proved Reserves of Oil Proved Reserves of Gas 15% 10% 6,40% 3,20% 5% 2% 1,00% 0,60% 0,70% 1,10% 0% Russia Azerbaijan Kazakhstan Turkmenistan Uzbekistan
Source: BP
Procurement of Gas in Central Asia (bcm)
45,0 40,0 35,0 30,0 Turkmenistan 25,0 Uzbekistan 20,0 Kazakhstan 15,0 10,0 5,0 0,0 2005y 2006y 2007y Source: Gazprom
Structure of Oil Export (January-June 2008)
2,36% 5,95% Sea 26,81% Druzhba Pipeline Railway CPS 64,88%
Source: Neftegazovaya Vertikal
ESPO and BPS Comparison
Maximum Forecast Capacity in Estimated Length Capacity 2006- 2007 Cost 66 million tons, BPS 950 km 76,5 million tons $2,5 billion 74 million tons $3,8 billion BPS-2 1300 km 50 million tons - First Stage of ESPO (the end 30 million tons by of 2009) 2757 km 2010, 50 million tons - $12,48 billion Taishet – Ust-Kut – by 2016 Tynda – Skovorodino To Kozmino: southern route Second Stage - 1963 km, First line: northern route Skovorodino – - 1903 km Total capacity – 80 Approximately - Kozmino, second (Total length million tons $29 billion line: Skovorodino – from Taishet Daitsin to Kozmino – 4720 km or 4660 km)
On 22 September Transneft completely filled up all the 1,102 kilometres of the first stage of ESPO in reverse mode, with 800,000 tonnes of oil
Thank you!