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technology, financing, and support providing, which will be prohibited not later than 90 day after the enactment of the law, Vedomosti reported. The draft law also prohibits investment into Russian LNG projects abroad, of, which Russia has none now, nor any plans to developed some. “In the worst case, if the proposed sanctions result in the immediate withdrawal of all the OFS (e.g. multistage hydrofracking, well completion, well logging and all others) provided by international companies (such as Halliburton and Schlumberger), which is difficult for us to imagine, that would have a tangible negative impact on the ability of Russian oils to keep production in the short term. By the medium term, Russian oil companies and OFS providers are likely to adjust, we think,” VTBC said in a note.“However, in the longer term, the technological lag would still mean a negative effect on the industry’s development. For this, we suggest watching the clarification on the list of the projects and services, which is to be published within 90 days of the law on sanctions coming into force. However, we deem the Russian oil industry ato be reasonably self-sufficient in general.”
Global demand for liquefied natural gas (LNG) in 2020 could increase sharply by 17% to 384mn tons from the 2018 level, according to a study of Shell LNG Outlook 2019. In 2018, this figure increased by 8% to 319mn tons (approximately 292mn tons in 2017). Shell associates a significant increase in global demand with the growing demand for LNG in China, where work is underway to reduce fuel that pollutes the atmosphere. In 2018, the demand for liquefied gas in the country increased by 40% compared to 2017 and exceeded 16mn tons, the report indicates. In 2017, this figure increased by 41% y/y. Growth in demand for LNG will continue in 2019, Shell analysts predict. Deliveries in the same period will increase by 35mn tons - they are absorbed by the Asian and European markets, the company adds. Moreover, by 2022, China and India can double their regasification capacity, Shell experts say: from 70mn tons to 145mn tons and from 28mn tons to nearly 65mn tons, respectively.
The state-owned Russian gas giant Gazprom expects the considerable rise in LNG production this year to be matched by an increase in gas consumption, with the new LNG volumes going to the premium Asian markets, Kommersant reported on February 27. The gas monopoly does not expect heavy competition with LNG on the European market, the paper writes. The share of LNG use in Europe has grown, but currently LNG only makes up about 11% of total consumption, according to Gazprom. Gazprom's head Alexey Miller earlier said that the company increased its gas output by 5.4% to 497.6bn cubic meters in 2018, and gas export - by 3.4% to 201bn cubic meters. Gazprom expects gas exports to Europe at 200 bcm in 2019, the company says. Gazprom may increase its output by 80-115bn cubic meters by 2035 thanks to developing projects in new regions, board member Oleg Aksyutin said on February 26. But most of the increase will be going to China as the new Power of Siberia pipeline comes online at the end of this year. Gazprom estimates that its share of the European gas market grew to 36.7% in 2018, from 34.2% in 2017, amid lower production in the region. At the same time Gazprom's average gas price has grown by 24.6% in 2018 and reached $245.5 for 1,000 cubic meters and expects natural gas prices in Europe this year to average $230- 250/kcm. “We believe that Gazprom will remain the most price competitive gas supplier, and therefore do not expect a significant drop in gas export volumes due to the increase in LNG production,” Ekaterina Rodina of VTB Capital (VTBC) said in a note.
OPEC has maintained its forecast for Russia’s liquid hydrocarbon output in 2019 at 11.49mn barrels per day, OPEC said in a report Tuesday. In
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