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    Russian Arctic Gas and Exports to the EU

Summary

Russian energy expert Roman Samsonov is optimistic of the possibilities for Russian gas production and exports from its Arctic region, although he...

by: Sara Vargas

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Russian Arctic Gas and Exports to the EU

Russian energy expert Roman Samsonov is optimistic of the possibilities for Russian gas production and exports from its Arctic region, although he admits – in his personal capacity – that dialogue has been somewhat lacking on the Russian side regarding its European partners. He was a guest speaker on Russia’s role in supplying the European market at a discussion hosted by the Brussels Energy Club (BrEC) December 16, under the Chatham House rule where speakers may not be identifiable.

Energy development in the Russian Arctic comprises eight main regions, that amount to "at least 51 trillion m³ of natural gas," said the head of gas and arctic energy at the Skolkovo Institute, Moscow region. For reference, the EU covered 39.7% of its gas needs from Russia in 2016, followed by Norway (34.1%), and Algeria (15.2%).

The EU's total demand amounted to 428bn m³ in 2016 according to BP’s statistics. Additionally, there are 33 companies in operation in the Yamal Peninsula alone, and they are little affected by sanctions on Russia, argues Samsonov, as the technology and machinery is mostly produced in Russia anyway.

He expects gas demand to keep growing in the coming years, at least until 2050, although he admits that Russian production also faces some challenges, in particular maintenance and repairs in older infrastructure as well as developing a constructive dialogue with European stakeholders (the European Commission, as well as society in general) in order to support continuous growth in that market.

The energy landscape has changed dramatically in the past 30 years, he argues, but he doesn’t see such a dramatic change coming in the next 30 years. Demand for natural gas will keep growing whatever the scenarios, he says. This generated disagreement among European experts present, who in turn argued that the Paris Agreement suggests at least 60% of Russian reserves should be kept in the ground.

When prompted by NGW to comment on the recent explosion at Baumgarten gas hub in Austria on December 12, a European energy expert described the potential danger of using the pipeline project Nord Stream 2 (NS 2) to carry most of Russian gas to Europe. Transporting 60% of Russian exports through the same route would create a choke-point that threatens security of supply, more so if the route goes through the sea where repairing would take longer, if an accident were to occur. Other experts claimed instead that should a problem occur with NS 2, other routes could be used again, including the Ukrainian route.

However, the official position of Gazprom and NS 2 representatives is that Ukraine’s transit capacity has decreased by a lot compared to its original design, owing to lack of maintenance. By neglecting transit through Ukraine even more, it would be hard to have it ready should the need arise, in case of an accident such as the explosion at Baumgarten. NS 1 has been operating without any problems since it started up in late 2012.