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Energy Is At The Center Of Falling Productivity Growth

Energy Is At The Center Of Falling Productivity Growth

The link between falling productivity…

Gazprom Wants 15% of Global LNG Market

Gazprom aims to capture 15% of the global LNG market over the next 15 years. In a press release, it stated that its board of directors agreed that LNG would be one of the company’s “core businesses,” and focusing more on LNG would allow the company to optimize its trading portfolio.  “A gradual increase in LNG output will allow Gazprom to seize a 15 per cent share in the global market by 2030,” the company said in its statement.

Gazprom sold its first LNG cargo in 2005, and since then has sold 148 LNG cargoes to 12 countries. While much of its business is done through pipelines over land, Gazprom sees LNG as an enormous growth opportunity. Gazprom estimates that the global LNG market will grow at a rate of 3% per year. Gazprom controls a majority stake in Russia’s only LNG project – the Sakhalin II facility off Russia’s eastern coast.  It has two LNG trains there, and is exploring the option of adding an additional train to boost production. Gazprom is also aiming to export LNG from a terminal in Vladivostok on its eastern coast, as well as from a facility on the Baltic Sea.

Related Article: Russia Eyes Crimea’s Oil and Gas Reserves

Russia is in good position to serve the large and fast-growing Asian market. Japan is by far the world’s largest importer of LNG, and it continues to need imported energy to replace lost capacity from its shuttered nuclear power plants. Gazprom’s export facilities are located very close to Japan.

The U.S. is moving towards greater LNG exports, and the ongoing crisis in Ukraine has given momentum to export backers. Still, U.S. LNG will need to compete in regional markets where other LNG capacity will be coming online. As Gazprom’s plans point out, Russia too will be vastly expanding its LNG export capacity, and could reach Asian markets at lower cost.

By Joao Peixe of Oilprice.com



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