Page 9 - FSUOGM Week 39 2021

FSUOGM COMMENTARY FSUOGM

via Ukraine (excluding deliveries to Moldova)
have been 107.3 mcm per day from 1 January to
31 August, equating to an annual equivalent of
39.2 bcm. Aside from January 2021 (when Gaz-
prom booked around 41.6 mcm per day of extra
capacity), Gazprom booked 15 mcm per day of
firm monthly capacity via Ukraine – the exact
amount offered by GTSOU, the Ukrainian gas
pipeline operator. This was also the maximum
amount covered by the Russia-Ukraine inter-
connection agreement on the Russia-Ukraine
border,” says Yermakov.
Gazprom remains reluctant to book more
export capacity – GTSOU is also offering “inter-
ruptible” capacity where space in the pipeline is The Yamal project is about tapping new
not guaranteed – partly as transit via Ukraine super-fields and building new pipelines to ser-
is now by far the most expensive option and vice them that can supply Europe for decades to
GTSOU has not been offering the usual 60% come. Moreover, the Nord Stream 2 gas pipeline
discount for interruptible capacity. is not only shorter; it is much cheaper to use,
improving the profitability for the development
Ageing fields of the Yamal fields and those beyond it in Rus-
Russia has a lot of gas, but some of its fields are sia's part of the Arctic, where some 75% of Rus-
getting very old. In a speech in September Gaz- sia’s untapped gas deposits are thought to lie.
prom CEO Alexei Miller said that Gazprom All these assumptions are built into Gaz-
has “reserves for 100 years” but the geography prom’s long-term investment strategy for the
from where it extracts its gas is changing, says development of its fields to 2035. All of the fall-
Yermakov. ing output at NPT will be taken up with new pro-
“For almost forty years, Russia’s gas out- duction from the Yamal complex.
put has been supported by the Soviet legacy The long-term demand from Europe may be
of super-giant Cenomanian gas fields in the limited after the EU launched its Green Deal this
Nadym-Pur-Taz (NPT) region in Western year. German Chancellor Angela Merkel was in
Siberia, but these fields are now in irreversible Moscow in September to meet with Putin and
decline,” says Yermakov. talk gas but during her visit she said that gas
“Gazprom has been trying to manage the out- imports from Russia could fall to nothing in the
put decline by developing wet gas from deeper next 25 years as the EU moves increasingly to
layers of the NPT super-giants, initially from renewables and tries to become carbon neutral
Valanginian, and recently from Achimov depos- by 2050.
its, but this can only slow the natural decline of For Gazprom the future is in the east, supply-
the NPT production, not reverse it. In order to ing China, where demand is expected to decou-
meet demand, Gazprom has been developing ple in the next few decades from the paltry 10
a new gas province on the Yamal peninsula in bcm China is currently importing from Russia,
the Russian Arctic since the early 2010s, where via the Power of Siberia pipeline.
the Bovanenkovskoye field, the first in a series of “The Asian market – the market of Asia-Pa-
the new super-giants, produced 99 bcm of gas in cific – has an exceptionally large capacity.
2020,” Yermakov added. According to forecasts up to 2040, consump-
Nord Stream 2 has been criticised as being tion in this region will grow by 1.5 trillion cubic
economically superfluous, as Ukraine has metres of gas, of which 60% will be imported,”
plenty of capacity (an estimated total of around Miller said at a conference in September.
145 bcm) to transit all the gas Russia wants to “There is no doubt that the Chinese market is
send to the west. But that ignores the fact that in the most dynamic and fast-growing one, and it
addition to the decline of the Cenomanian fields,
the pipelines serving it are also at the end of their
useful life and are due to be decommissioned.
“Gazprom has already announced that it will
be decommissioning the older pipelines in the
Central corridor in line with the reduction of
flows from NPT caused by production declines
there. Some of these pipelines have been in
operation for over forty years and have passed
the limits of their economic life, imposing high
repair and maintenance costs on Gazprom,”
Yermakov said. “This means that the capacity of
Russian pipelines leading towards the Ukrainian
transit corridor is going to decline substantially
in the future, limiting the volumes of gas availa-
ble for the Ukrainian route.”

Week 39 29•September•2021 www. NEWSBASE .com P9