Summary of Week 6
The early 2020s could be a very competitive period for LNG supplies to Asia.
Russia possesses the potential to produce significant gas from its Eastern Siberia and the Far East. The reserves currently stand at 5 trillion cubic meters (tcm). Prospective reserves could be as large as 65 tcm. Despite the obvious logic of linking enormous gas resources to the expanding consumption center of Asia, to date Russia’s only significant exports in the region are from Sakalin-2 project, which currently sells 14.6 bcm of LNG to Asian countries.
As alternative LNG exports commenced arriving in Asia, the overall situation does not particularly favor Russia’s expansion and diversification strategy. The lopsided energy policy emerges clearly when we look at Russian energy relations with Japan and South Korea. At present there is no direct oil pipeline to Japan or South Korea. T
hat outcome hardly squares with Russia’s avowed objectives for the sale of oil or gas to Asian countries. China’s role is likely to increase remarkably, as the country stands to receive more than a third of Russia’s energy exports by late 2020s.