Friends in gas

Russia wants to see more co-operation between gas exporters rather than competition.

­Government and Gazprom officials both want to see closer ties between Russia and other exporters such as Qatar, and the way to do that is more joint projects according to Leonid Bokhanovsky, General Secretary of the Gas Exporting Countries Forum – the gas equivalent of OPEC.

“What is important is that it should be fair competition,” he said.” We do advocate looking for ways to minimize competition among gas-producing nations. “

According to Bokhanovsky the most attractive gas markets are in Asia and Latin America, particularly Brazil,Argentina and Chile.
“This is where I see ample opportunities for cooperation among our member states. In addition, there is a good opportunity for cooperation on swap transaction, and on optimizing logistics.” Bokhanovsky said.

The Russian Ministry of Energy forecasts increasing demand from European and Asian customers, and that experts suggest should be the catalyst for setting cooperation priorities. The Chief Executive of Gazprom, Alexandr Medvedev, says the forecast demand me be very conservative. “China is expected to grow gas consumption to 300 billion cubic meters by 2030. While experts believe that European gas consumption will grow to 200 billion cubic meters in 2030, nevertheless, some people expect these volumes already in 2020.”

Above all Germany’s decision to shut its nuclear power plants will drive European demand in the coming years, an executive with Qatari producer Rasgas believes. “We think LNG demand in Europe will continue to grow, especially with the nuclear shutdowns in Germany,”

Given this scenario GECF members believe it is vital gas producers establish a balance of interests of suppliers and consumers. To achieve this, Ministry of Energy says, it will take time to build relationships between “seller” and “buyer” on the basis of long-term contracts.

The Russian Energy Ministry believes the long term contracts guarantee an uninterrupted supply of energy to consumers. And on the other hand they are able to provide a return on multibillion-dollar investments for construction of pipeline and infrastructure on the new fields.

The GECF says members “recognize the importance of long-term gas contracts to achieve a balanced risk sharing mechanism between producers and consumers.” GECF, whose members hold just under 70% of the world’s natural gas reserves, are also calling for enhancing cooperation between member states and with consumers, especially in the field of technology.

Meanwhile, during the International Gas summit in Doha, Qatar assured Russia it will not intend to raise gas supplies to Europe in the short or medium term, “Qatar has informed us that it will be reducing or at any rate  not  increasing gas supplies to Europe,” Shmatko said.
According to Shmatko, the decision of Qatar is due to the prevailing market conditions.

Qatar is Gazprom’s main competitor in Europe. In the past, this country built up its stake in the European gas market to 6.2%, bringing in 35.6 billion cubic meters. Because of this, the share of Gazprom has decreased from 26.3% to 24.5%.

Leave a comment