Industry Trend Analysis - Gas Growth From Yamal To East Siberia - NOV 2017

BMI View: Russian natural gas production has increased more than 10% through July, supported by stronger domestic and export demand. The start-up of Yamal LNG in Q417 will see this trend continue to 2019 and with the Power of Siberia connection with China , gas production will reach 700bcm by 2021 .

Russia has pumped more natural gas in the first seven months of 2017 than in the same period over the previous five years and is on track to produce a post-soviet high of 670bcm over the full year. Using the data for H117, Russia produced 343bcm, some 36bcm more than 307bcm produced in H116.

Stronger European demand has been a major driver behind the increase ( see ' Gas Production Up On European Demand ' , July 14). According to Gazprom, sales of natural gas to non-former Soviet Europe were 119.1bcm in H117, around 10bcm higher than the same period on 2016. However, given that around 85% of Russia's pipeline gas exports are delivered to non-FSU Europe, this indicates that demand in the major former Soviet countries and demand domestically has markedly improved. Despite this, Gazprom revenues have been hit y-o-y, largely due to a stronger rouble and low sales prices.

Strong Sales Over Summer Months
Russia Natural Gas Production (bcm)
Source: Department of Energy

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