Russia’s liquefied natural gas production rose by 3.5 percent last year to a total 30.5 million tons, according to data from Rosstat, the country’s official statistics agency.
In December alone, Russian producers turned out 2.85 million tons, which was up 1.4 percent on the year and 5.8 percent on November, Rosstat also reported.
Russia is a relative newcomer on the LNG market but has already staked a solid claim, eyeing a market share of 25 percent in the medium term, Deputy Prime Minister and former Energy Minister Alexander Novak said earlier this month in an interview with news outlet RBC.
Meanwhile, thanks to its abundant natural gas reserves, the country has quickly become the world’s fourth-largest LNG exporter, after Qatar, Australia, and the United States. Most of Russia’s LNG comes from the Yamal LNG project, majority owned and operated by Novatek.
Despite its ambitious plans for liquefied natural gas, Russia, like other exporters, felt the pinch of lower demand amid the coronavirus epidemic, with LNG exports falling sharply in 2020 from 2019. Now that demand is beginning to improve, Novatek and Russia’s second LNG producer, Gazprom, will likely see higher shipments, especially to Asia, where demand for the fuel is most likely to rebound quickly and start growing.
In fact, Novatek expects the LNG market to swing into a deficit of 150 million tons annually by 2030 because of the delay or cancellation of final investment decisions on new capacity, a move in response to the pandemic’s effect on energy demand.
Yet the possibility of natural gas as a whole falling out of favor because of the energy transition and "falling out of the equation is grossly overstated," Novatek’s CFO Mark Gyetvay said, as quoted by Argus this week.
In fact demand for LNG will likely grow along with global renewable energy capacity thanks to coal phase-outs and plans for much greater hydrogen production, Gyetvay said at the virtual European Gas Conference.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com