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Arctic Yearbook 2013
Filimonova
diversification of its gas export markets and a reduction in its dependence on European energy
consumption. Gazprom is facing certain difficulties in relation to the European countries, who are
also trying to reduce their energy dependence on Gazprom. Specially, Europe is reviewing projects
which bypass its traditional gas suppliers. As a result, the Nabucca project has been replaced with a
plan to construct a Trans-Anatolian gas pipeline through Azerbaijan and Turkey and it is estimated
that the first gas supply will be launched in 2017. At the same time, intensified talks have been
launched on the Trans-Caspian gas pipeline construction under the Caspian Sea, through which gas
from Turkmenistan will be supplied directly to the European market.
In addition, the prospective LNG supply from North America, Africa or Middle East in the nearest
term could reduce Gazpom‘s share on the European gas export market and could force the
company to reduce gas prices. Gazprom has already made certain concessions towards gas price
reduction. In January 2013, the company reported that a gas price reduction of 10% had been
achieved by Austrian Econgas, Italian Sinergie Italiane, Slovak SPP, Wingas German and French
GDF Suez (Pronedra, 2013).
At the same time, Gazprom faces certain difficulties in relation to the Asian market as well. Despite
the recently signed agreement between Gazprom and the Chinese Company CNPC on gas supply
from Russia for a period of 30 years, Russia and China have not reached an agreement on the price
of the Russian gas deliverance yet. The issue of gas price decrease also represents a challenge in the
relations between Gazprom and Japan concerning prospective LNG supply from the ―Vladivostok
LNG‖ plant to the Asian country.
On the other hand, there is a time constraint in LNG development by the Russian companies due to
growing competition from other countries like the US, which are hoping to start shipping LNG in
2015, as well as Canada and Australia who, like Russia, view fast-growing Asian countries as
prospective energy markets. At the same time, Asian countries are also trying to reduce their
dependence on oil and gas imports. Chinese and Japanese companies are planning to launch the
development and extraction of shale oil deposits and Japan has already successfully extracted gas
from frozen methane hydrate in its coastal area. In addition, the prospective relocation of energy
production into new areas with high extraction costs, places a serious challenge for the Russian
companies, in particular Gazprom, concerning its future gas price negotiation policy at a time of a
prospective increase of the LNG supply.
At the same time, despite the official policy recently expressed by the Russian President Vladimir
Putin to develop energy supplies for Asian markets, the European market is still regarded as the
major one. In support of this policy, Vladimir Putin must restart the work of the ―Yamal - Europe
2‖ pipeline project, aimed at improving the reliability of deliveries to Slovakia, Hungary and Poland.
In addition, Gazprom announced recently its plans to return to the LNG plant building project in
Primorsk, which Gazprom had given up in favor of the Shtokman project eight years ago, to supply
gas to the European markets (Serov, Timoshinov et al, 2013). In turn, a launch of the LNG project
in Primorsk places in question the prospects of Shtokman field development and the capacity of
Gazprom to implement offshore energy projects in the Arctic in the nearest future. However,
according to Maria Belova, a senior analyst at the business school Skolkovo, an LNG plant in