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Expensive and blue. Why Russia will change the oil needle on the gas?
Material posted: Publication date: 09-01-2017
If oil shale from the U.S. will continue more and more pressure on oil prices and the Russian share of the market, Moscow in the coming years may change the priorities. The role of the main "breadwinner" of the state budget will gradually shift from black gold to gas. Now oil brings to the country twice more than natural gas. But after 10 years the situation will change.

Analytical center for the Government of the Russian Federation has prepared a report that predicted long-term increase in the cost of natural gas on all major Russian markets. According to forecasts of government analysts (the document is in the possession of life), most likely gas will go up in constantly losing its own production Europe. There are only 9 years later, the blue fuel will rise in price almost twice — from the current $158 per thousand "cubes" up to $286 per thousand cubic meters In Asia receiving gas mainly in the liquefied state, the price tag will grow more slowly — first with the current $243 to 290 per thousand cubic meters by 2020 and then to $358 by 2025.

After speaking with experts and looking at statistics, life found two factors that will ensure the future growth of gas prices.

The gas will cling to the oil

The very first comes to mind, oddly enough, oil. As usual in Economics, the cost of natural gas in much of the world depends on the cost of black gold. At the end of 2015, for example, according to the Institute of energy of the Russian Academy of Sciences (ERI RAS), the so-called oil binding was more than half of all long-term gas supply contracts. LNG this proportion does exceed 69%. However, it is worth noting that the change in gas prices, as a rule, lags behind oil by about a few months.

But there is a belief that in 10 years the world may reconsider the importance of oil prices — and the relationship will weaken, says in a conversation with Life Deputy Director of energy Institute for energy and Finance Alexei belogoriev.

— If prices do come off and will be formed based more on regional gas markets, that is, depending on the balance of supply and demand, the rising cost will not be so strongly expressed. But, first, this process is very long, and secondly, not obviously, tied to the balance of supply and demand, gas prices will suddenly stop growing, he explains.

In General, while maintaining the binding that is likely to happen, with estimates close to the government analysts would be difficult to disagree. With projected rise in oil prices from the current $40-42 at least $80 per barrel of gas will also rise by about two times, says belogoriev.

Eurasia presses on gas

However, as statistics show, even during the execution of the second scenario, in which gas is still "unbind" from his constant companion — oil, natural gas has all the chances to become more and more expensive.

For example, this gas, according to the ERI RAS projections, will become a leader in the growth of consumption among all energy resources of our planet. According to ranavav, by 2040, the global annual demand will reach 5 trillion cubic meters, that is a third higher than last year. Approximately 75% of its future growth it owes to the growing popularity among electricity providers.

Degradability hardly have time for the future billions of gas profits. Most of the large gas fields in the world have already been introduced and has passed the peak of production, and recent discoveries, for example in Europe, have not justified hopes of power, says the managing Director of ClearView Energy Partners consulting (USA) Kevin Beech.

In Europe the production of gas is reduced for several years. If from 1990 to 2005, gas production in the Old world grew by 68%, by the end of 2014, falling to 47%. Judging by the fact that the deposits in the Netherlands permanently reduce production and hope for Norway, wrote life, was long gone, the drop will continue.

In RAS, for example, by 2025, expecting it to reduce from the current 260 billion cubic meters of annual production of up to 202 billion cubic meters Local power company, for example, the Austrian OMV, and does build fatalistic predictions that from 2017 we can expect annual losses in production to 50 billion cubic meters.

Europe can not get away from the increase of imports, believe in the Russian Ministry of energy. According to the forecast of the head of Department Alexander Novak, in order to recover losses in the next 15 years the region will need to increase and so overlap more than half the gas needs of procurement of 100-150 billion cubic meters of Conditionally agree with this, and his counterpart from the European Commission Maros Sefcovic that predicts that by 2030 demand increase to 450 billion cubic meters Now, according to the EC, Europe annually purchases about 400 billion cubic meters and of these about 60% is taken by Russia.

If the trend continues, the import dependence of Europe will only grow: first from the current 48% to 58 by 2020, and then to 62 by 2025, I believe in ERI RAS. Russia, incidentally, has already began to receive their dividends: according to "Gazprom", together with the growth of gas production (+3% on the 3rd quarter of 2016) is growing and its exports to the EU countries — during the year, their gas dependence from Russia was strengthened with a 30 to 33.5%.

And the demand is known, creates supply. In this sense, the rising cost of gas would be expected to challenge and it will be difficult — says Beech of ClearView Energy.

Trend of increase in demand, by the way, is characteristic not only for Europe but also for Japan, in which government analysts also expect prices to rise. However, the same height to achieve here is to put it mildly, difficult: poor energy and so the country depends on gas imports 97%, by 2025 this percentage will grow to a maximum of 98%, wrote the academics. At the same time the gas consumption of the Country of the rising sun, according to RAS will reduce from 124 billion cubic meters to 94 billion cubic meters.

The needle is changed, and gas — will remain

— The current situation leads to the fact that the popularity of gas from brokers and investors as more stable and predictable in terms of price of fuel is constantly increasing, says Kevin Beech from ClearView Energy. — The main disadvantage of oil, for which it strongly dislike is the high dependence on the exchange, volatility — today, oil is expensive, but if tomorrow there was a terrorist attack at one of the large oil fields or ports of liquid — the oil will inevitably collapse.

The growing cost of gas, probably in conjunction with the General trend in the increase of the tax burden on the gas and "Gazprom" will lead to increased share of natural gas in the Russian budget revenues, thus displacing the oil, said Alexei belogoryev from the Institute for energy and Finance. According to the Ministry of Finance, in 2015, the revenues from oil exports were blocked gas revenues more than doubled, bringing the year $89,5 bln vs $41.8 billion of the proceeds from the sale of raw materials-competitor.

— All say that the oil industry is overburdened with taxes, and gas — on the contrary, nedozagruzheny, so the increase in the tax burden on it is to be expected. While export revenues are distributed for the most part in favor of the investment program of "Gazprom", but by 2020, large projects have a monopoly over, and while ideas where to direct the released work, no. Thus, with a gradual increase in the gas tax, but they will go into the budget, — the expert predicts.

Alex Pogosyan


Tags: resources , gaz

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