Possible results of Russian gas export liberalization
Baku, Azerbaijan, August 7
By Leman Zeynalova – Trend:
Liberalization of Russian gas export would be highly beneficial for both Russia and Europe, Edward Chow, a senior fellow in the Energy and National Security Program at the Center for Strategic and International Studies (CSIS), told Trend
“So far, Russian gas export policy liberalization has been limited to a couple of projects involving liquefied natural gas (LNG). Far more important would be liberalization of the export of pipeline gas, which would be highly beneficial for both Russia and Europe,” said the expert.
For Russia, it will allow to tap abundant associated gas which are currently wasted for lack of market access and for Europe, it would lead to more competitively priced gas, Chow believes.
“LNG makes sense for Russia where gas is located in remote locations with access to the sea, such as in Sakhalin and Yamal peninsula. It does not make sense for gas in remote landlocked locations, such as western and eastern Siberia where pipelines have to be the primary mode of transportation for taking gas to market. Since this is where the bulk of Russian gas resources are located, pipeline gas will remain Russia's comparative advantage,” he added.
The Russian Security Council’s inter-agency commission for security in the economic and social spheres has encouraged the country’s government to boost liberalization of gas export, meaning that the export monopoly of Russia’s state-owned energy giant Gazprom might be terminated.
Gazprom is the only company that currently has the right to export pipeline gas from Russia. Other states and private companies are only authorized to export LNG.
The commission recommended the government to “determine the priority directions of the state policy for development of the LNG industry, coordinate a strategy for [gas deliveries] to target markets, conditions for liberalization of gas export with the consideration of existing risks for economic security [of Russia] as the structure of energy demand [in the world] is changing,” the meeting’s protocol read.
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