Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Prime news agency about the impact, which the situation with gas consumption in China will have on the markets of the Asia-Pacific region (APR) and other regional markets in the coming years.
The expert also notes that the Power of Siberia pipeline is expected to reach its design capacity of 38 billion cubic meters per year by 2024.
“It should be noted,” Alexey Gromov says, “that the bulk of the gas sent to China, which is about 70 billion cubic meters of LNG and the entire volume of pipeline supplies from Russia, Myanmar and countries of Central Asia, provided by long-term contracts, prices in which are significantly lower than on the spot market this fall in Asia."
"And China is actively contracting new LNG volumes in order to insure against the need to urgently buy additional spot volumes in the future," he adds.
Explosive growth in consumption
Thus, in the coming years, it is the situation with gas consumption in China that will have a decisive impact not only on the market of the Asia-Pacific region (APR), but also on all other regional markets, which are becoming increasingly interconnected with each other due to the ongoing intensification of LNG supplies, the expert concludes.
"It is China that is currently experiencing a real 'boom' in demand for natural gas," Gromov says. "It is expected that by the end of 2021, consumption in the country will grow by 40-45 billion cubic meters, or 12-14% compared to last year." Such an increase in demand in absolute terms is not observed in any country in the world, the expert points out.
What lies ahead for Europe
Any news related to Russian gas supplies to China is unlikely to have an impact on the position of European and German officials regarding the solution of the issue related to the certification of Nord Stream 2, Alexei Gromov says.
For Europe, the Russian LNG supplies by Novatek may be important, the expert develops his thought. However, in the autumn-winter period, when navigation along the eastern route of the Northern Sea Route (NSR) stops, the bulk of LNG from Yamal is usually sent to European consumers, he said.
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