Russia’s Energy Minister Alexander Novak said that the share of liquefied natural gas (LNG) on the global gas market may double to reach 70% by 2040.
According to him, the segment of LNG production has "huge potential." As of today, the share of LNG in global (gas) trade stands at 35%, whereas by 2035 it will exceed 50% and reach 70% by 2040," he expects.
Novak said that Russia will be working towards boosting substantially its share on that market, adding that its LNG production potential is around 100 mln tonnes per year, TASS reported.
A senior analyst of 'Uralsib', Alexei Kokin, speaking to Vestnik Kavkaza, noted in the first place that the share of LNG on the global gas market may indeed double to reach 70% by 2040. "I think Novak in his forecasts is based on quite authoritative sources. For example, the recently published BP outlook also contains a rather optimistic LNG forecast," the expert said.
"This is due to the fact that the demand for gas as an energy carrier will outpace the demand for energy, since the share of coal will decline. New pipelines for various reasons are unlikely to be built so actively. Rather, consumers will prefer LNG as a more flexible and less risky source. Therefore, based on the fact that gas demand will grow at a faster pace, and the method of gas delivery preferred by consumers is still LNG, this is quite a likely scenario," the analyst said.
At the same time, he noted that Russia's market share will depend on development of Russian LNG export projects. "So far, the most successful project is Yamal LNG. Further growth will be due to the Novatek's Arctic LNG 2 project. The source will also be the Utrenneye field in the northern part of the Gydan Peninsula. But it's difficult to say what's next. In principle, Russia has the opportunity to expand capacity on Sakhalin, build a plant in Vladivostok," Kokin explained.
He also shared his opinion on the likelihood that, due to the resource base, Russia will be able to sell up to 100 mln tonnes per year. "Theoretically, we can assume that some part of the pipeline gas being supplied to Europe will be repurposed to liquefied gas, but it requires large investments in plants. If if is done, then even bigger numbers are possible," the senior analyst of 'Uralsib' concluded.
