The International Power Agency (IPA) published the next long-term forecast of «Prospects for the development of global energy». Russia is predicted to have an unenviable gas future: the share of our producers on the world stage should be halved. But, most importantly, how much is it in absolute terms.

IPA considers that «the share of Russia in international trade in gas which in 2021 made 30%», by 2030 (in the basic scenario of the forecast) will be cut by half. By this moment the new capacities making the liquefied natural gas (LNG) will be entered.

Absolutely fairly International Power Agency expects rapid growth of the offer of LNG in the second half of the 2020s. So, by its assessment, it is planned, «that by 2030 capacities for gas liquefaction [...] will increase by 250 billion cubic meters a year» (from 635 billion cubic meters a year in 2022 to 885 billion cubic meters a year in 2030). This gain is a very essential size which makes about 45% of the LNG volumes (about 537 billion cubic meters) delivered last year on the market.

It is also necessary to agree that the main input of new plants on liquefied natural gas production will happen in a short interval of 2025-2027. And the most part of these capacities accounts for two countries — the USA and Qatar.
If we estimate plans of the companies in the United States and Qatar, by 2027 it will be placed into operation enough capacities to throw on the market approximately 147 billion cubic meters a year. In this regard in the second half of the 2020s the world can face overproduction crisis.

The threat of such a crisis is great and in general has long been recognized by players. If to rely on the saved-up experience (for example, in 2019-2020), such crises strike the greatest blow to the capacities connected with the short-term market on which exchange quotations have huge impact.

The most part of gas in the world arrives to buyers with an oil binding. In the conditions of overproduction crisis such gas becomes less attractive to buyers. But at the same time to the sellers who are guided by exchange quotations it becomes extremely unprofitable to maintain former sales levels. Yes, those of them with a significant financial cushion can operate at a loss in order to maintain market share. But besides, as shows experiment, a part of deliveries will simply disappear.

And the market will not receive them until the balance of supply and demand is restored.

You should not overestimate market stability of new plants in the USA in case of overproduction crisis. Besides, it is necessary to remember that the volume of deliveries is about 100 billion cubic meters less than the rated power of all plants.

IPA claims that the increased offer of the liquefied natural gas «creates serious difficulties for strategy of diversification of Russia in the direction of Asia». Besides, the agency proceeds from rather modest growth rates of economy of China. The tradition to bury economy of the People’s Republic of China arose not today and even not yesterday. It is remarkable that by the time of when IPA published the forecast in which claimed that the economy of China will increase «all» by 4.9% in the current year, the largest world financial institutions managed to revise similar forecasts, relying on fresh statistics for the third quarter, on average on 0.2 percentage points (to 5.2-5.3%). It seems like a little, but behind these tenth lay significantly larger amounts of energy consumption. It is an open question, how in that case it is possible to trust the long-term forecast of IPA which takes one of basic postulates delay of growth of economy of China.

In this context it is important for our country that the agency expects double decrease in a share of the Russian producers of natural gas in the world market — from 30% in 2021 to 15% in 2030. The problem is only that it is not clear, how experts of IPA received 30%.

In 2021 «international trade in gas» made about 1.2 thousand billion cubic meters. Our country provided less than 20% of this volume. Perhaps, masters of statistics meant only a pipeline segment in which the share of Russia was about 28.6%. Most likely, this riddle has very simple answer — someone from authors was mistaken with the formulation. It again forces to ask a question of quality of the forecast.

In this case, it is interesting how much export supplies of Russian gas could, in principle, amount to by 2030. Especially as stability of the internal prices of natural gas regulated by the state was provided with export profit. And in the current year because of inaccessibility about 100 billion cubic meters of pipeline capacities on the western direction the volume of the Russian gas export to foreign countries will make approximately 65-75 billion cubic meters from which about 22.6 billion cubic meters will be delivered to China. The Russian pipeline projects on the Chinese direction practically do not compete owing to geographical and logistic factors with supply of LNG to this country. At the moment we have three pipeline projects focused on the People’s Republic of China: already operating Force of Siberia (power of 38 billion cubic meters a year), a Far East route along which the contract is signed (10 billion cubic meters a year), and Force of Siberia — 2 (50 billion cube. m a year) on which expect signing of the contract. Also, perhaps, a part of deliveries from Russia will go to China through Central Asia. There is also an Indian direction, for which it is too early to talk about any specific volumes.

If all necessary agreements on «Force of Siberia — 2″ are signed soon, by the end of the current decade about 100 billion cubic meters can be delivered to China on pipelines (taking into account possibility of excess of design capacity).

If the route through Central Asia is involved, it will be possible to add about 15-20 more billion cubic meters to this volume. The question is only in needs of China which in the current year (after small reduction in 2022) have to reach about 400 billion cubic meters. Demand in China is growing advancing rates.

The problem for Russian gas workers is the predictability not of China, but of the Western direction. The collapse of demand, which we observe in the European gas market the last two years (in the sum — about 100 billion cubic meters since 2021), proceeds. It is not known when restoration can begin and how successful it is. It is also not known what will be with economy of Turkey, not the first year testing the crisis phenomena. Let’s not forget and about a political component.

If deliveries on the western direction remain at least at the current level and on east will come to 100 billion cubic meters, our country will return to the level of pipeline export to foreign countries, characteristic for the middle of the 2010s. And taking into account the expected LNG export growth from our country by 2030 total deliveries abroad will exceed 200 billion cubic meters. In view of that IPA expects preservation of world consumption of gas at the current level if the share of our country and decreases, it will be a question not of double falling, and of reduction within 10-20%. , if all plans are realized in time, in 2030 the Russian gas export in absolute volumes can reach indicators of 2021.