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Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

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Russia Looks To Expand Its Domestic Natural Gas Network

  • Western sanctions and the exodus of international oil and engineering companies from Russia after Putin’s invasion of Ukraine will slow down Russia’s energy industry development.
  • Russia’s claims that it can provide all the equipment necessary for domestic gas networks come amid a row with the West.
  • “It is important to upgrade our capacities by replacing foreign exploration, drilling, and offshore equipment, as well as accelerating work on our own medium- and large-tonnage LNG equipment,” Russian Trade and Industry Minister Denis Manturov said.
Russia Natural Gas

Russia is capable of manufacturing by itself all the equipment necessary for expanding its domestic gasification network, Russian Trade and Industry Minister Denis Manturov said on Friday.

“We will be able to provide ourselves all the technological equipment and piping for the gasification of the whole country,” the minister said during a speech at the Russian Parliament, as carried by Russian news agency TASS.

“It is important to upgrade our capacities by replacing foreign exploration, drilling, and offshore equipment, as well as accelerating work on our own medium- and large-tonnage LNG equipment,” Manturov was quoted as saying.   

Russia will also accelerate the timeline for testing and launching mass production of large gas turbines, said the minister, who was just promoted to also serve as one of Russia’s deputy prime ministers. 

Western sanctions and the exodus of international oil and engineering companies from Russia after Putin’s invasion of Ukraine will slow down Russia’s energy industry development because Moscow can no longer rely on Western equipment, analysts say.

Russia’s claims that it can provide all the equipment necessary for domestic gas networks come amid a row with the West, in which Moscow slashed deliveries to Europe in the middle of June. Russia said that a gas turbine for a Nord Stream compressor station being repaired by Siemens at a facility in Canada could not be returned due to the Western sanctions on Russia. European leaders, including those of Germany and Italy—whose countries are most affected by the slashed Gazprom deliveries—have said that the Russian excuses are “lies” and that the lower gas supply was a politically motivated decision.  

Earlier this week, Canada agreed to return the Gazprom turbine that Siemens Energy sent to a factory in the North American country for repairs earlier this year. The decision comes after calls from Germany to return the turbine, so, according to German Economy Minister Robert Habeck, Russia has no excuse to keep gas flows along Nord Stream at 40 percent of the pipeline’s capacity.  

By Charles Kennedy for Oilprice.com

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  • Mamdouh Salameh on July 15 2022 said:
    The author must be deluding himself if he believes even for one second that Western sanctions and the exodus of international oil and engineering companies from Russia will slow down the development of Russian energy industry.

    The country who led the world in space exploration, nuclear technology and many other technological fields neither needs Western technology nor Western finance. It has both.

    A case in point is Russian oil giant Rosneft’s spectacular Vostok oil project in the Arctic in which ExxonMobil was involved in its development.

    When Exxon was forced to withdraw from the project in the aftermath of sanctions imposed on Russia in 2014 by the US after the annexation of the Crimea, Rosneft went ahead and developed a homegrown state-of-the-art technology and with government financial support managed to develop huge reserves of gas and oil on its own.

    As a result, Russia will be adding by 2024/25 an estimated 1.5 million barrels a day (mbd) of Arctic oil to its overall oil production.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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