With no substitute likely to be found for natural gas any time soon, Russia should work to steadily increase its production levels over the next two decades, argues Prime Minister Vladimir Putin. One way to achieve that, in his view, is by starting new operations for deposits across Yamal and Eastern Siberia.
While acknowledging Gazprom's pivotal role in Russian gas recovery, Putin also highlights the increasing importance of independent operators, saying their share in total output should now be brought to at least 30%.
These and other steps are set forth in the Russian government's new blueprints for the development of the gas industry until 2030. Government officials and gas industry professionals discussed the draft in Yamal on October 11.
Top management of Novatek, Russia's largest independent gas producer, invited Putin to take part in the launch of the Yurkharovo project's third leg. The prime minister seized this occasion to send the national gas industry to new heights.
"Let us know when you're ready," said the Yurkharovo CEO, visibly nervous.
In the control centre, solemn-looking operators wearing uniforms stood staring at the black "Start" button.
"You go ahead," Putin gently pushed the executive toward the button.
"No, you go first," protested the man.
"Come on, come on," the prime minister insisted, placing a hand on his host's shoulder. "And we'll stand by."
"Ready, steady, go," the Yurkharovo chief commanded finally with a sigh of relief.
"It's a dream coming true for all Novatek staff, with the output finally brought to capacity, which is 33 billion cubic metres annually."
Gas torches were set burning over the Ob inlet and Putin headed off to Novy Urengoi to discuss prospects of the gas industry with insiders.
Alternative sources of energy don't stand much chance in Russia, it seems. There is only so much sunshine here, and local windmills hardly ever pay off, let alone make profit. With this in mind, the Russian government has decided to focus its energies on natural gas, this country's most abundant energy source.
"No realistic alternative to natural gas will be available in the foreseeable future," Putin said. "There's no substitute out there, neither in power engineering, nor in industrial production, nor in the utilities sector. We should therefore increase our gas output to an annual 1 trillion cubic metres, up from today's 650 billion. That's a 1.5-fold increase, roughly. And we've got all it takes to meet the target."
The Russian government is planning to start new operations in Yamal, in Eastern Siberia, and on the continental shelf, launching the Bovanenkovo and the Shtokman projects. Gazprom is the principal operator here. This energy giant accounts for about 80% of Russia's total gas output. Only 16%-20% falls on independent producers' share at the moment. Putin suggested it should be increased to at least 30% by the year 2030.
"Commodities remain the mainstay of Russia's exports, quite frankly," the prime minister acknowledged. "Domestic producers should try to take up lucrative niches on the energy market, diversifying their output to meet modern-day demand."
The government suggests expanding the use of natural gas as fuel for motor vehicles. It is cheaper than gasoline, and cleaner environmentally. Putin has said public transportation and utility trucks should take the lead.
Speaking of gas consumers, the prime minister said priority should be given to domestic needs.
According to the government's fresh targets, 86% of all Russian customers should get access to natural gas supplies by 2030. In urban areas, the rate is to be brought to 90%, on today's 70%. An additional 25,000 kilometres of pipelines will have to be built for the purpose.
Pricing is another prominent issue. Gazprom has been instructed to set reasonable, economically justifiable prices, without having consumers pay for its operational costs. In some of Russia's regions, such as Kamchatka, natural gas is still offered to local consumers at a price higher than that set for foreign customers.
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Anastasia Savinykh