Govt raises forecasts for gas, LNG productions in 2035 strategy

MOSCOW, Apr 2 (PRIME) -- The Russian government has approved the country’s draft 2035 energy strategy, raising the forecast for production of natural gas and liquefied natural gas (LNG) in the year, the Energy Ministry said in a statement on Thursday.

The gas production plan was raised from 860 billion cubic meters to 1 trillion cubic meters per year in 2035 from 850–924 billion cubic meters, while the LNG production plan was raised to 80–140 million tonnes from the previously expected 70–81 million tonnes. The LNG production plan for 2024 was kept at 46–65 million tonnes and the gas output plan remained unchanged at 795–820 billion cubic meters.

Russia also expects formation of the global gas market and balancing of gas prices in different regions of the world in the medium term. Expansion of LNG production and exports will play the key role in this, and the share of LNG in international gas trade will rise significantly, the ministry said in the strategy.

Global demand for oil should peak between 2025 and 2030s. But development of technologies for production of shale oil and other tight reserves expanded the economically efficient resource base and created excessive oil supply on the global market starting from 2014. Coordinated actions of OPEC, Russia, and other countries balanced demand and supply in 2017–2019, but the situation is still unstable and may need further coordinated actions.

Nevertheless, oil supply may contract after 2020 as the most economically efficient reserves will have been depleted and investment in geological exploration and oil and gas projects contracted. These prerequisites create conditions for intensive investment in shelf and other expensive projects, which may prompt a new cycle of growth of prices for oil.

In the medium term, general economic factors like growth of the global economy, condition of financial markets, and others, and political and social factors, including the coronavirus pandemic and similar events will affect oil prices.

Under the strategy, cross subsidization in the country’s power sector, when one group of consumers pays for lower tariffs for other groups of consumers, until 2035 will be eliminated.

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