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TRANSCRIPT
The 8th St. Petersburg Gas Forum
China Emerging as Global Gas Super Power:
View of the Exporter
Sergei Komlev Head of Contract Structuring and Price Formation Directorate
Gazprom Export
5 October 2018, St. Petersburg
2
China is the Fastest Growing Global Market for Natural Gas.
Coal Phase-out is Driving Chinese Gas Demand Higher.
Source: S&P
«China Emerging as Global Gas Super Power: View of the Exporter»
3
In 2018 Credible Agencies Revised Upward their Forecasts for Gas Consumption in
China
Scenarios and forecasts of gas consumption in China, 2018 versus 2016
105 127 142 161 176 186 206
237
2016 estimate
338 307 309 309 297
334
379
512 461 479
509 516 460
570
2018 estimate
384 421
361 400 397
340
584 610
532,5
650 616
600
498
0
100
200
300
400
500
600
700
800
900
10002
01
0
201
1
201
2
201
3
201
4
201
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201
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Ave
rage
CE
DIG
AZ
BP
En
erd
ata
CN
PC
IEA
WE
O
U.S
. D
OE
Ave
rage
IEA
WE
O
En
erd
ata
CE
DIG
AZ
BP
CN
PC
U.S
. D
OE
bcm
2010-2017 2025 forecasts 2035 forecasts
«China Emerging as Global Gas Super Power: View of the Exporter»
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China Gas Consumption Structure Outlook by Source and Distribution Sector
Источники: IHS, Wood Mackenzie
«China Emerging as Global Gas Super Power: View of the Exporter»
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Domestic Production Falls Behind Growing Demand Giving a Boost to LNG
and Pipeline Gas Imports
Sources: Bloomberg, IHS
0%
3%
5%
8%
10%
13%
15%
0
50
100
150
200
250
300
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Rest of world China China's % of total
China: Share of global LNG imports
Source: IHS Markit
MM
tpa
40%
50%
60%
70%
80%
90%
100%
0
50
100
150
200
250
300
2000 2002 2004 2006 2008 2010 2012 2014 2016
Domestic production LNG imports Pipeline imports % Domestic (right)
China: Sources of gas
Source: Bloomberg, Chinese Customs, IHS Markit
bcm
«China Emerging as Global Gas Super Power: View of the Exporter»
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Spot Deliveries Could be the Major Source of LNG Supply to China
«China Emerging Global Gas Super Power: View of the Exporter»
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With Russian Gas Arrival China Becomes a Major Importer of Pipeline Gas
POWER
OF SIBERIA 2
West Siberia Fields
POWER
OF SIBERIA
AMUR GPP
Chayanda
Kovykta
Blagoveshchensk
Belogorsk
Lensk
Irkutsk Gorno-Altaisk
Surgut
RUSSIA
MONGOLIA
CHINA
KAZAKHSTAN
KYRGYZSTAN
NORTH KOREA
SOUTH KOREA JAPAN
SUPPLIES
FROM
FAR EAST
Myanmar - China
Overall Length –
Turkmenistan: 184,5 km, Uzbekistan: 490 km,
Kazakhstan: 1300 km, China: 4500 km.
A+B pipelines total capacity: up to 30 bcma,
С pipeline capacity since 2015 – up to 25 bcma.
Length: 2520 km. Capacity: 12 bcma
Length: 2158 km.
Export capacity: 38 bcma.
Start of deliveries: 2019.
Source: Gazprom Export 20 December, 2019 START OF DELIVERIES
Ramp-up period of gas deliveries to China via Power of Siberia
Russian pipeline gas exports to China
may exceed 68 bcm/year, 2020+
«China Emerging as Global Gas Super Power: View of the Exporter»
38
0
10
20
30
40
2019 2020 2021 2022 2023 2024 2025
8 «China Emerging Global Gas Super Power: View of the Exporter»
Russian Gas Bears no Political Leverage
9
2016 2020 outlook
Russian Pipeline Gas Comes to Gas-Hungry Regions of China
Source: Regional reports on gas market development, PJSC Gazprom
POWER
OF SIBERIA
POWER
OF SIBERIA 2
«China Emerging as Global Gas Super Power: View of the Exporter»
Note: darker areas represent more gas consumption
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Source: Gazprom Export
Small-Scale LNG Industry Flourishes in China: Good Example for Russia to Follow
In China, there are over 180 small-scale LNG plants with an aggregate nominal production capacity of up to 100 mmcm/day. In Russia, there are only 5 small-scale LNG plants currently producing 34800 tons of ssLNG per year.
China: 180 ssLNG plants up to 100 mmcm/day
FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF
Russia: 5 ssLNG plants 0,15 mmcm/day
F
«China Emerging as Global Gas Super Power: View of the Exporter»
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Source: Argus Media, Gazprom
Russia is Above China in Terms of Underground Gas Storage Capacity
The world’s largest UGS is Russia’s Northern Stavropol Gas Storage, with active capacity of 43 bcm.
26
75
Underground Gas Storages in Russia in China
BCM total capacity of UGS in Russia in China
25
8
«China Emerging as Global Gas Super Power: View of the Exporter»
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CHINA:
«China Emerging as Global Gas Super Power: View of the Exporter»
Domestic Gas Price Formation in Russia and China: Commonalities Favor
Exchange of Experience in Market Liberalization
RUSSIA:
$35
$45
$55
$65
$75
$85
Wholesale Gas Pricing in Russia
Min
Max
Av.
38,3
59,5
80,8
61%
39%
Gas Prices Formation in Russia
71%
29%
Gas Prices Formation in China
Regulated price Non-regulated price
$150
$200
$250
$300
$350
Wholesale Gas Pricing in China
Min
Max
Av.
163
264
322
13 «China Emerging as Global Gas Super Power: View of the Exporter»
Thank you for your attention!
Pho
to b
y S
. Kom
lev