Russia's energy prospects

By Vestnik Kavkaza
Russia's energy prospects

Mankind will require 30% more energy than today in as soon as 20 years’ time. This is due to the global economic development, rising population, better quality of life and growing consumption, especially in developing countries, Russian President Vladimir Putin said yesterday, speaking at the Russian Energy Week forum. According to him, the geography and structure of energy demand will primarily shift towards Asia-Pacific countries. "Presently, nearly all developed nations have opted for clean energy development, including renewable energy sources. They account for over half of the global power generation. By 2035, their share in the global energy balance is expected to grow from 15 to 23%, and in electric power generation – from the current 7% to 20% (without hydropower). However, the traditional power sector will also undergo transformation. For instance, the modern prospecting and production technologies make hard-to-access oil and gas reserves more accessible, including the Arctic potential reserves," Putin said.

According to him, another key trend will be the lowering of energy intensity of the economy, first of all due to the mass use of modern technology; digitalisation of the energy sector; as well as the increased accessibility of energy and energy infrastructure in general. "Regional markets are being integrated, traditional logistics chains see new energy delivery routes, first of all the Northern Sea Route and the Silk Road. A flexible LNG market is being formed. Thus, the number of LNG consumers has doubled over the past decade."

Russian Energy Minister Alexander Novak, speaking of gas exports yesterday, noted that the production and sale of liquefied natural gas abroad is partially liberalized today and allows stimulating the implementation of major investment projects on the construction of LNG plants. "This is a purposeful policy that gives us the opportunity to increase our market share and occupy a large niche. In accordance with the draft strategy for the period up to 2035, we plan to increase LNG production from today's 11 million tons to 70 million tons. LNG growth and consumption rates will increase around the world. The number of LNG consumers has doubled over the past decade. And this trend will continue, as it is a new, modern technology for delivering gas, which is affordable to consumers. LNG will go down in price and take its market share faster than pipeline gas," Novak said.

Nevertheless, according to him, pipeline gas will remain one of the main sources: "Its current share is about 70% of the total global gas trade. In the long term, according to many experts and according to our vision of the strategy, the share of pipeline gas will be approximately 50%. Therefore, we will also pay special attention to the development of the pipeline infrastructure. Our policy is to maintain a single export channel for the sale of pipeline gas. "