Natural gas in Russia
In 2021
According to The World Factbook estimate, the country also has the largest proven reserves (47 trillion cubic meters (tcm)).[1] BP estimates put Russia with 33 tcm.[2][3] Additionally, Russia is likely to have the largest volume of undiscovered natural gas deposits, an additional 6.7 tcm, according to 2011 US Geological Survey estimations.[4] Russia consumes approximately 460 bcm a year.[1] Flaring is a problem in Russia.[5]
Subsidies
There is a long history of subsidy of natural gas in Russia. Subsidies for natural gas has been one of the reasons for the limited growth of renewable energy in the country.[6] However, it is difficult to estimate the extent of subsidy, as there is no benchmark price.[7] Often netback calculations[clarification needed] have been used,[8] but there are arguments against their validity in determining the size of domestic subsidies.
Gazprom has had its gas sale price to domestic and industrial customers regulated by the Russian government since 1991, sometimes close to the operational cost, meaning that it needs to obtain high export sale values to generate a profit to subsidise the poor domestic return.[9]
The IEA estimated 2021 gas subsidies at 42 billion USD, the largest in the world (it also estimated electricity subsidies as the largest).[10] Between 2014 and 2021 domestic gas prices in Russia increased annually by between 2% and 7%, in 2022 prices rose 8.5% with a 2023 price rise of a further 8%.[11]
Consumption
In 2022 over 40% of electricity was generated by gas.[12]
Automotive
The use of natural gas cars in Russia is encouraged by the government.
Flaring
Russia flares more than any other country.[5] The level of flaring increased in 2022 following the loss of the export pipelines to the EU to 1.6 bcm per annum, 9,000 tonnes of CO2 being emitted daily.[18]
Exports
The EU
The
Production of Russian gas in 2022 was 20% lower than in 2021 and it is likely to be years before Russia will find alternative buyers for the lost 120 bcm
The EU aims to end gas imports from Russia by 2027, including LNG.[22]
China
On 21 May 2014, Russia and China announced an agreement between state controlled gas companies Gazprom and
Tentative agreements had been reached several times since 2005, but each time final negotiations broke down over price.[25] The agreed upon price was not disclosed, but those familiar with the situation said getting a lower price than European buyers was a key demand of China in the negotiations.[23] However, Russian representatives said the price would fluctuate based on the market price of oil, making the deal closer to what Russia had wanted than to what China had been asking for.[24] The total value of the deal was estimated at US$400 billion.[23] It will increase Russian exports to countries not part of the former Soviet Union by 25% and make China the country's 2nd largest customer, after Germany.[25]
The agreement was reached as Chinese and Russian leaders met to discuss greater cooperation in Asia without involvement of Western powers. It was seen as an important political and economic victory for Russian President
The Power of Siberia pipeline, was commissioned in December 2019. Carrying a maximum of 61 bcm per annum, it runs 3,968 km (2,466 mi) to the Chinese border, where it then connect to a 3,371 km (2,095 mi) pipeline to distribute the gas in China.
A new pipeline
Turkey
Much
Disputes with Ukraine
2005-2009
Since 2005, the Russian gas supplier Gazprom and the Ukrainian oil and gas company Naftogaz have been involved in a number of disputes. These disputes have grown beyond simple business disputes into transnational political issues that threaten natural gas supplies in numerous European countries dependent on natural gas imports from Russian suppliers, which are transported through Ukraine.[28]
During 2005, Russia claimed Ukraine was not paying for gas, but diverting that which was intended to be exported to the EU from the pipelines. Ukrainian officials at first denied the accusation, but later Naftogaz admitted that natural gas intended for other European countries was retained and used for domestic needs.[29][30] The dispute reached a peak on 1 January 2006, when Russia cut off all gas supplies passing through Ukrainian territory.[31] On 4 January 2006, a preliminary agreement between Russia and Ukraine was achieved, and the supply was restored. The situation calmed until October 2007 when new disputes began over Ukrainian gas debts. This led to reduction of gas supplies in March 2008. During the last months of 2008, relations once again became tense when Ukraine and Russia could not agree on the debts owed by Ukraine.[citation needed]
In January 2009, this disagreement resulted in supply disruptions in many European nations, with eighteen European countries reporting major drops in or complete cut-offs of their gas supplies transported through Ukraine from Russia.
On 8 June 2010, a Stockholm court of arbitration ruled Naftogaz of Ukraine must return 12.1 billion cubic metres (430 billion cubic feet) of gas to RosUkrEnergo, a Swiss-based company in which Gazprom controls a 50% stake. Russia accused the Ukrainian side of siphoning gas from pipelines passing through Ukraine in 2009.[38][39] Several high-ranking Ukrainian officials stated the return "would not be quick".[40]
2014
In 2014, Russia seized Crimea and took assets belonging to Ukraine, with no compensation paid. In 2023, A court in The Hague ordered Russia to pay US$5 billion in compensation to Naftogaz.[41]
Effect on Russian natural gas during war with Ukraine
The
Sanctions on Russian banks make it hard for Gazprom to receive money from international sales, which in 2022 fell 45.5% to 100.9bcm.[45]
Gazprom published a loss during the second half of 2022 of 1.3 trillion roubles ($17.3 billion) after losing 75% of its export sales.[11]
See also
- 2021–2022 global energy crisis– Worldwide crisis affected by shortage of energy supplies
- 2022 Russia–European Union gas dispute– Fossil fuel financing-related conflicts
- Energy in Russia – Overview of the production, consumption, import and export of energy and electricity in Russia
- Energy policy of China – Energy sources used and produced by China
- Energy policy of Russia – Overview of the energy policy of Russia
- Environmental injustice in Europe
- List of countries by natural gas consumption
- List of countries by natural gas exports
- List of countries by natural gas production
- List of countries by natural gas proven reserves
- List of natural gas pipelines
- Natural gas prices – Wholesale prices in the market of natural gas
- Natural gas transmission system of Ukraine
- Russia in the European energy sector
- Russia–Ukraine gas disputes – Disputes between Naftogaz Ukrayiny and Gazprom
References
- ^ a b c "The World Factbook: Russia". CIA. Retrieved 21 May 2014.
- ^ "Table 3.2 Natural gas proven reserves by country". Opec.org. Archived from the original on 2018-02-27. Retrieved 2014-05-22.
- ^ BP Statistical Review of World Energy Archived 2013-12-06 at the Wayback Machine.
- ^ Christopher J. Schenk (2012). "An Estimate of Undiscovered Conventional Oil and Gas Resources of the World". US Geological Survey.
- ^ a b Global Gas Flaring Tracker Report (PDF) (Report). March 2023.
- ^ Overland, Indra; Kjaernet, Heidi (2009). Russian Renewable Energy: The Potential for International Cooperation. Ashgate.
- hdl:11250/2442561– via ResearchGate.
- hdl:11250/2442564– via ResearchGate.
- ^ "Domestic Gas Prices in Russia - Towards Export Netback?" (PDF). November 2011.
- ^ "Energy subsidies – Topics". IEA. Retrieved 2023-09-04.
- ^ a b "Russia approves big hikes in Gazprom's domestic gas prices". 18 July 2023.
- ^ "Russian Federation | Electricity Transition". Ember. 2022-03-28. Retrieved 2023-09-04.
- ^ a b Kramer, Andrew E. (11 April 2013). "Russia Skips Hybrids in Push for Natural Gas Cars". The New York Times. Retrieved 25 June 2017.
- ^ "NGV fuel". Gazprom.com. Retrieved 25 June 2017.
- ^ "О сети". gazprom-agnks.ru (in Russian). Retrieved 25 June 2017.
- ^ "Газовые автобусы НЕФАЗ будут обслуживать Чемпионат мира по футболу в Екатеринбурге". Национальная Газомоторная Ассоциация. Retrieved 25 June 2017.
- ^ "Метановая Лада Веста стала мелкосерийной". autoreview.ru. Retrieved 25 June 2017.
- ^ "Russia burns gas into the atmosphere while cutting supplies to EU". Reuters. 26 August 2022.
- ^ a b "The need for action". Retrieved 5 September 2023.
- ^ a b "EU gas supply: When Russia went into self-destruct mode". Deutsche Welle. 31 August 2023.
- ^ "Gazprom in Search of New Natural Gas Markets After Exports to Europe Plummeted in 2022". Retrieved 11 January 2022.
- ^ "The EU can manage without Russian liquified natural gas". Bruegel | The Brussels-based economic think tank. 2023-08-30. Retrieved 2023-09-04.
- ^ a b c d Jane Perlez (21 May 2014). "China and Russia Reach 30-Year Gas Deal". New York Times. Retrieved 21 May 2014.
- ^ a b c d "China signs 30-year deal for Russian natural gas". Washington Post. AP. 21 May 2014. Archived from the original on 22 May 2014. Retrieved 21 May 2014.
- ^ a b c Brain Speglee; Wayne Ma; Gregory L. White (May 21, 2014). "Russia and China Agree on Long-Sought Natural Gas Supply Contract". Retrieved May 21, 2014.
- ^ "Russia announces progress with China on the Power of Siberia 2 gas pipeline". 23 March 2023.
- ^ "Turkey-Russia Energy Cooperation on Natural Gas". Retrieved 2023-09-08.
- ^ "EU reaches gas deal with Ukraine". BBC News. 1 August 2009. Retrieved 1 August 2009.
- ^ "Ukraine gas row hits EU supplies". BBC. 1 January 2006. Retrieved 16 December 2008.
- ^ "Ukraine 'stealing Europe's gas'". BBC. 2 January 2006. Retrieved 16 December 2008.
- ^ "Ukraine takes extra Russian gas". BBC. 24 January 2006. Retrieved 16 December 2008.
- ^ "18 countries affected by Russia-Ukraine gas row". Reuters. 7 January 2009. Retrieved 7 January 2009.
- ^ Cendrowicz, Leo (9 January 2009). "Russia-Europe Gas Spat Ends—For Now". Time. Archived from the original on January 17, 2009. Retrieved 9 January 2009.
- ^ "Ukraine says has good winter gas stocks for Europe". Reuters. 7 September 2009. Retrieved 7 September 2009.
- UNIAN. 8 September 2009. Retrieved 8 September 2009.
- ^ "Gazprom sees political risk to Ukraine gas payments". Reuters. 12 September 2009. Retrieved 12 September 2009.
- ^ "Ukraine, Russia's Gazprom disagree on 2010 imports". Kyiv Post. 8 October 2009. Retrieved 8 October 2009.
- ^ "Ukraine to remain without gas because of RosUkrEnergo? | Events". Mignews.com.ua. Retrieved 2014-05-22.
- ^ "Бойко обещает как-то удовлетворить Фирташа". Minprom.ua. 12 June 2010. Retrieved 2014-05-22.
- ^ "Бойко объяснил Фирташу, что газ он быстро не получит | Украинская правда". Pravda.com.ua. 2010-06-13. Retrieved 2014-05-22.
- ^ "Ukraine's Naftogaz declares victory over Russia in $5B court battle". 13 April 2023.
- ^ Cooban, Anna (31 August 2022). "Russia cuts more gas supplies to Europe as inflation hits another record". CNN.
- ^ "Gazprom: Nord Stream 1 gas to stay shut until fault fixed, "workshop conditions needed"". Reuters. 2022-09-02.
- ^ "Germany freezes Nord Stream 2 gas project as Ukraine crisis deepens". 2022-02-22. Retrieved 2023-03-08.
- ^ "Russian Gas Exports Outside Ex-Soviet States Fell 46 Percent In 2022, Gazprom Figures Show". Radiofreeeurope/Radioliberty. 2 January 2023.