Wednesday, February 21

A gas crisis is imminent: market forecast in the short term

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How the gas crisis will affect the Russian market

The decline in global demand has hit all markets painfully, but for energy it has become a catastrophic phenomenon. Not only oil has been affected, but there has also been a gas crisis. According to experts, this year the demand for blue fuel will decrease by about 4% or 150 billion cubic meters. This decline will be the highest in the history of the market.
Analysts hope that the situation will start to improve a little bit already in 2021 – the positive dynamics will be due to low cost of raw materials on the background of growing economic activity. The increase in demand will be at about 1.5% until 2025.
The greatest interest in gas will be shown by representatives of the industrial sector, they will account for about 40% of the demand. China will become a leader in fuel imports, as the country is already actively increasing its production and rates. It is expected that gas consumption in the country will grow by 130 billion cubic meters.
Experts predict that Russia will have good prospects as a supplier. It may take the second position in the world in terms of gas sales, and by 2025 it will occupy about 20% of the growth of all global raw materials production. The first position will be occupied by the USA, where the increase in fuel production will amount to 1.2% or more than 1 trillion cubic meters annually.
The state corporation Gazprom, which may lose about 1.5 trillion rubles of income, also faces problems. The fact is that the company has signed a contract with China for gas supply for 30 years. However, as a result of rush, technical violations and mistakes during geologic exploration it turned out that the Chayanda field will not be able to meet all the needs for raw materials.

The contract between the countries was concluded last year, it implies Russian gas supplies to China in the amount of 38 billion cubic meters per year for 30 years. The raw materials are planned to be supplied via the Power of Siberia pipeline. However, the Chayanda field may not provide such large supplies that it will be a source of problems for Gazprom. All this could have been avoided if the exploration had been conducted according to the rules and without using various manipulations to win tenders for government purchases. The main reason for the situation is that the field is not ready for development, as it was already at the exploration stage. “Gazprom was in a hurry to enter the Chinese market and therefore started to force the events. Now it is necessary to conduct additional exploration for the field to understand whether it is possible to reach the planned volumes or not. The problem is also aggravated by the general situation of gas price decline on the world market. Therefore, the corporation hopes for a rapid growth in demand to cover the losses.

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