Page 84 - RusRPTDec18

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Russia and Saudi Arabia have agreed to extend the oil production cuts, ahead of the Opec+ meeting scheduled for December 5-7 in Vienna, Vedomosti daily and Interfax reported on December 2 citing Russian President Vladimir Putin on the side-lines of the G20 forum in Argentina. Russia has been capping its production as part of the Opec+ deal agreed with the Middle Eastern oil cartel to boost prices on the international market. Russia agreed to cut 300,000 barrels a day out of total 1.8mnbd (million barrels daily) under the terms of the deal that expired earlier this year.
Bulgaria is pressing ahead with its plans to spend €1.4bn ($1.59bn) to build a new gas link to Turkey to transport Russian gas from the Turk Stream pipeline to Europe, Reuters reported on November 30. The lawmakers reportedly gave the green light to the state gas company Bulgartransgaz to launch tenders to build a new 484km gas link that will carry mainly Russian natural gas from Turkey, bypassing Ukraine to the south. Previous reports claimed that although Russia has not yet confirmed officially that the second line of the Turk Stream (aka Turkish Stream) pipeline – its extension to Europe – will go through Bulgaria, the country has already calculated that it will require an investment of BGN2.6bn, but will generate a profit of BGN4.35bn within 20 years, Energy Minister Temenuzhka Petkova said in interview with Nova TV on November 24.
Gazprom’s gas exports to Europe will exceed 200bn cubic meters in 2018, Deputy Chief Executive Officer of Russia’s top gas producer Alexander Medvedev said on December 3, adding that next year the company plans to reach similar volumes. "I assume that at least 200bn cubic meters will be exported in 2019 as well," he said. According to Medvedev, Gazprom received requests for additional volumes of gas exports to Europe from 2020. "I want like to note that this figure - 200bn cubic meters - is very close to the volume of our annual contract quantities. We have already received requests for additional export volumes starting from 2020.
The demand for Russian gas will increase 1.5-fold over the next two decades the International Energy Agency (IEA) said in its forecast for 2040, released on November 13. Europe will account for a lot of the increase in the short-term, but ultimately China will become the engine for growth – a trend Russia is already anticipating by building large new pipelines to connect the two countries. Global annual gas consumption will grow to almost 5.4 trillion cubic meters and gas trade will grow to 1289bn cubic meters (bcm) per year by 2040, predicts the IEA. Russia will account for more than a quarter of the global supply of gas. The main market for Russian gas, the European Union, will cease to be so by 2040, according to the IEA. In the mid-2020s. demand for imported gas in Europe will reach a maximum of 409bcm per year, and the share of Russian gas, as now, will stay at around 37% of Europe’s imported gas supplies. After 2040 the demand for gas in Europe will start to fall, but at the same time domestic European production will also fall, so that by 2040 Russian exports will be less than in 2017, or approximately 140bcm per year, according to the IEA. China will become the main buyer of gas in the world by
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