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Results of Pivot to the East in Oil and Gas Sector

Results of Pivot to the East in Oil and Gas Sector

The plan of the pivot to the East began to be implemented in the Russian oil and gas sector long before another worsening of relations with the West. The motives behind it were most pragmatic.

Consumption of oil and gas grew in Asia, and limited local reserves made it possible to forecast with confidence that Asian countries would top the list of importers of hydrocarbons. Meanwhile, Russia does have reserves of oil and gas in the East that could be monetised.

Also, Russian state monopolies and their contractors are pleased to develop new transport infrastructure – and eastern projects have given them ample opportunity.

More than four years of life under sanctions have showed that from a political point of view too, the pivot to the East has proved correct. So what are its actual results?

Detailed analysis is presented in the new report prepared by the National Energy Security Fund and answering the following questions:

  • What are the prospects of gas market growth in Asia?

    • Is there a place for Russia in it?
  • At what rates are resources being developed and infrastructure created for the beginning of gas supply to China by pipeline?

  • Should one expect the beginning of supply to China from the Urengoy cluster?

    • What are the pros and cons of the Power of Siberia 2 project?
    • What are the difficulties of negotiations with the Chinese?
  • What market do new LNG projects target?

    • How much liquefied gas will come to Asian countries from Yamal and Gyda?
  • What awaits the Sakhalin gas production centre

    • How will gas from Sakhalin-1 and new projects on the island’s shelf really be monetised?
  • In what way is the infrastructure being used that was created for oil export to the east?

  • What is the structure of oil supply to China?

  • Why has China never become a serious investor in the Russian upstream segment and a major shareholder in Rosneft?

  • Will the trend continue towards a decline in oil supply to Europe in favour of a dramatic growth of import into China?

Contents of the report: 

Introduction 3
Projects to Supply Gas from Russia to Asia 5
A brief overview of the gas market of China 5
A brief overview of the gas market of Japan and South Korea 13
The prospects of Russian LNG projects in the Asian market 16
Yamal LNG 19
Three ‘Arctic LNG’ Projects 28
Power of Siberia and Power of Siberia 2 Pipeline Projects 37
Sakhalin Gas Projects 46
Russia in Asian Oil Market 55
Russia in Asian Oil Market 55
Logistics of Russian Oil Supply to Asia and Rosneft Contracts 58
Reorientation of Oil Supply from West to East 65
China as Investor in Russian projects 69
Medium-term Forecast of Developments 75
Date of release: December 18, 2018

If you are interested to obtain please contact » Elena Kim

Other issues:
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Regulation of Oil and Gas Sector in 2019 and Prospects for 2020
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The “zero hour” comes in less than a month: the contracts for gas transit through Ukraine and for supplying Russian gas to the country terminate at 10 am on 1 January. Meanwhile, Gazprom and Naftogaz are very far from looking for a mutually acceptable solution. The entire European gas business is watching intently the negotiations between Russia and Ukraine. Everyone is waiting for a new “gas war”: the January 2009 events proved to be a serious test both to European consumers and to Gazprom as a supplier. Is there still a chance of agreement? If there is not, will Gazprom cope with its obligations to deliver gas to Europe? Is Russia bluffing as it assures that the new infrastructure and gas in underground storage facilities will enable it to get by without Ukrainian transit even as soon as this winter? What will happen to Ukraine itself at the beginning of 2020?

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

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