Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the PRIME Economic Information Agency on the prospects for replacing the European energy market with the Asian one for Russian oil and gas exports.
Gromov noted that the situation with the reorientation of supplies of various types of energy resources from west to east is developing differently. Although with the introduction of an embargo on the supply of oil and petroleum products to Europe, Russia is losing a large sales market, a complete replacement of the European market is possible. As regards the supply of petroleum products, the situation is more complicated. Europe accounted for almost 2/3 of Russia's deliveries, and there is no other such niche in foreign markets.
"Asia can significantly help in diversifying Russian energy exports, but it will not be possible to completely replace the European market with the Asian one. In the future, everything will depend on the speed of the corresponding infrastructure development," Gromov believes.
"In the energy sector, major oil and gas projects have already been implemented, which allow us to send significant amounts of energy resources to the East. This is the ESPO oil pipeline, this is the Power of Siberia gas pipeline. I think that new projects are not far off, including the project " Power of Siberia-2," he said.
"However, Europe will not be able to find the volume of oil products it needs on other markets," Gromov emphasized.
As for gas, as the expert noted, Europe did not impose sanctions on gas supplies from Russia, but after sabotage on the Nord Stream gas pipelines, a decrease in exports through Ukraine and a ban on supplies through the Yamal-Europe gas pipeline, pipeline gas supplies may be reduced from 145 billion cubic meters in 2021 to 30-35 billion. According to Gromov, in 2022, deliveries through the Power of Siberia will amount to about 20 billion cubic meters, in 2023 - up to 30 billion. Thus, about 20% of the lost European market, the expert predicted.
According to him, the remaining volumes can be redirected to the domestic market of Russia, as well as to Turkey - in connection with the planned expansion of the "Turkish stream" and the construction of a gas hub in Turkey.
"One of the most important decisions will be the speedy implementation of the Power of Siberia-2 project, but even it will allow only half of the shortfall in gas exports to be redirected to Europe, and then only by 2028-2030. And even after that, 50 billion cubic meters remain to be redirected", Gromov believes.
Gromov also noted that the main obstacle to the reorientation of energy exports to Asia will be the lower solvency of Asian buyers compared to Europe.
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