Page 6 - AsianOil Week 16 2022

AsianOil COMMENTARY AsianOil

Moscow’s race against time

to divert energy exports

from Europe to Asia

The scramble to shift gigantic volumes of oil and gas to Asian markets

will likely take many years and tens of billions of dollars

INVESTMENT EUROPE’S unprecedented push to sever all oil, condensate and other petroleum products,
energy ties with Russia has left Moscow scram- while only about 2mn bpd are shipped to mar-
WHAT: bling to re-orientate its vast oil, gas and coal kets in Asia.
Russian President exports to Asian markets. But achieving such Likewise, Russia’s pipelines sometimes send
Vladimir Putin has a monumental feat would likely take years, not over 200bn cubic metres of gas to Europe,
ordered his government to mention tens of billions of dollars in new whereas China – the only other major market
to draft a plan to divert infrastructure, and Asian buyers may simply with a pipeline link to Russia – took only 10.5
oil and gas supplies that not have the appetite of the ability to absorb the bcm last year. And the Power of Siberia that car-
go to Europe to Asian extra supplies. Nevertheless, Russia finds itself in ries that gas only came online in December 2019
markets instead. a race against time to redirect energy flows east- after ten years of negotiations.
wards before taking too great a financial hit from Russia’s two main LNG export terminals in
WHY: Europe rejecting them. the Arctic and in the Far East are also very new
Europe has vowed to end On April 19 Russian President Vladimir and can deliver an additional 38 bcm of gas on
its reliance on Russian Putin ordered his government to draw up plans tankers to markets across the world, but mainly
oil and gas as quickly as by June 1 to switch Russia’s pipeline infrastruc- Asia. Sakhalin LNG production started in 2009
possible. ture from west to east and build the necessary and the first train of the Yamal LNG plant went
new energy infrastructure. online in December 2017.
WHAT NEXT: Since it was set up in 1970s Russia’s existing In percentage terms, Europe typically
Quick solutions are not infrastructure has always been heavily geared accounts for around 60% of Russia’s oil and
possible, especially for towards serving European markets and has oil product exports and 70% of its gas exports.
gas, as the infrastructure long largely ignored delivery channels tar- Delivering oil and gas to Asia has very much
requirements for this geting Asia. The Soviet-era Druzhba pipeline been a recent development and remains small
shift are colossal. and Russia’s north-west and Black Sea typi- compared to Russia’s main business: selling
cally deliver around 5mn barrels per day of hydrocarbons to Europe.

Russia’s LNG terminals
can deliver additional
supply to markets
around the world, but
mainly Asia.

P6 www. NEWSBASE .com Week 16 22•April•2022