Tuesday, October 23, 2012

Putin Wants Gas Exports to Focus on Asia

In light of falling demand in Europe, as well as the EU's recent anti-monopoly probe of Gazprom, President Vladimir Putin ordered a review of Russia's natural gas export policy to take advantage of rising Asian demand.  "The priorities should be supplies to the domestic market, our own economy and our enterprises, as well as diversification of markets to account for the prospective Asian segment and means of delivery," Putin told a Kremlin energy policy commission.  Russia, the world's second-largest producer of natural gas after the United States, has for years unsuccessfully tried to secure a deal to sell pipeline gas to China, the world's largest energy consumer. The two countries have failed so far to iron out differences over issues such as price and routes.  As part of a closer supervision of energy policy Putin has also warned Gazprom to begin developing Arctic oil and gas deposits, including its Bovanenkovo field in the Yamal peninsula.  Gazprom has delayed the commissioning of Bovanenkovo, discovered in the 1960s, several times due to weak gas demand and to an anticipated large capital outlay necessary to develop it ($10 billion over several years).

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