BAKU, Azerbaijan, April 7. Russia will be looking to the East to replace its energy export revenue, but export capacity to China and neighbours is currently limited and new transmission pipelines and LNG export terminals take a long time to build, Trend reports with reference to DNV GL.
“Hence, we find that gas production in North East Eurasia, which includes Russia, Ukraine and other former Soviet Union countries, will decline by 24% in 2024, as there is not sufficient infrastructure to export the gas,” the report released by DNV GL reads.
In contrast, the company estimates that Europe itself will produce 12 percent more gas between now and 2030, reflecting the industry’s reaction to higher oil and gas prices in the short term and responses to the pledge from EU to deliver more gas.
“High oil and gas prices will stimulate new developments globally, but in the wake of this initial rush to new production, over the next decade global demand will likely reduce rather than increase, as GDP growth and globalization reduce, and both oil and gas production and transport hence inch a little lower. Thus, we anticipate that over-investments will result in lower oil and gas prices in the second half of this decade and our model suggests that this will lead to a small increase in global oil use later in the 2030s relative to our pre-war forecast,” the report says.
The DNV GL analysts noted that largest uncertainties have to do with the war itself – its duration and possible escalation, and whether strengthened countermeasures bring the export of Russian oil and gas to Europe to complete stop.
“While it is likely that Europe’s commitment to its Fit for 55 climate plan will endure, public reaction to energy affordability may challenge its momentum in the short term. There are many other imponderables, like whether the war will give rise to a new cold war, or end in a calmer détente. With all these uncertainties in mind, we have chosen to model a scenario where the European energy system discontinues the importation of Russian gas, with zero Russian gas imported from 2025 onwards,” reads the report.
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