Russia's Energy Strategy 2035: The focus is on liquefied petroleum gas

Russia’s Energy Strategy 2035: The focus is on liquefied petroleum gas

The Russian government recently approved the Plan for the Implementation of the National Energy Strategy to 2035, taking into account the directives of the President.

Russia 2035: In Tam La when Hoa Long
Russian LNG plant in the Arctic.

The plan includes 130 projects, covering all areas in the energy-fuel complex, from resource extraction to electricity and heat supply for each household.

In terms of crude oil production, Russia continues to develop traditional reserves, further exploits existing oil fields, expands oil and gas exploration on the continental shelf, focusing on the Arctic region.

Regarding the gas industry, Russia rapidly develops the Yamal, Eastern Siberia and Far East regions to serve gas exports to the Asia-Pacific and Gazprom continues to play a key role in the gas industry and is optimistic. aiming to dominate the LNG market. However, analysts estimate that no reforms will be made with this giant Russian monopoly.

Russia is betting on the LNG sector with its complexes in Sakhalin and Yamal and Novatek leading the industry with a target of 80 million tonnes of LNG by 2035.

Russian Prime Minister Mishustin said that the plan includes a series of proposed measures, including increasing LNG production to 140 million tons, building LNG transshipment, storage and trade centers; low-carbon hydrogen production; develop automobile charging infrastructure; develop oil and gas reserves that are difficult to recover.

Most of the projects will be implemented in the period 2021 – 2023.

The Russian government has also decided to allocate 21 billion rubles for the construction of a canal connecting Bechevinskaya Bay with the LNG hub in Kamchatka, where the private energy company Novatek will transfer LNG from standard icebreaker vessels such as Arc7 to conventional LNG carriers to continue exporting to Asia-Pacific countries.

Russia 2035: In Tam La when Hoa Long
Russia is giving a lot of support to the private company Novatek for the canal project supporting the North Sea Route.

The plan to build an LNG transshipment complex in Kamchatka will also have the task of short-term temporary LNG storage before distribution. This complex will contribute to increase the tonnage of the Northern shipping route by three times within 10 years. It is expected that Novatek will supply LNG from the Yamal LNG and Arktik LNG-2 projects along the northern sea route to Bechevinsky Bay in Kamchatka, from where LNG will be delivered to the Asia-Pacific region.

The 6.6 km long canal, expected to be put into use in 2023, will be an effective tool to support the transport of liquefied gas through Russia’s North Sea Route.

With the support of icebreakers, the transport from Russia to Asian countries through the Bering Strait will be 15 days, shortening the time by half compared to going through the Suez Canal and through it, reduce shipping costs. In September, LNG shipments from the Yamal LNG facility in the Yamal Peninsula, Northwestern Russia via the NSR Route reached 700,000 tons, despite the Covid-19 pandemic.

The London-based company Agus Media reported that the volume of Russian goods increased more when the Arctic waters were showing signs of thawing. Approximately 935 trips were made in the first half of 2020 via the NSR Route. Yamal LNG is taking the market share, with 257 trips.

The joint assessment said that the North Sea Route will hardly replace the Suez Canal in global trade. However, things have reversed with the ice in the Arctic. Russia and China are promoting the creation of a new route in the Northern Hemisphere. As a result, the Arctic LNG 2 project has attracted $9.5 billion from the China Development Bank and $5 billion from Germany’s Euler Hermes.

Russia 2035: In Tam La when Hoa Long
Russia is promoting faster and stronger North Sea route to not only sell energy to Europe but also want to dominate the Asian market.

Russia’s 2035 energy plan seems to reserve all the development for the Asian market. The plan also focuses on realizing the goal of increasing oil and gas production output, as well as forming a common energy market in Eurasia, significantly expanding the volume of energy exports to countries in the Asia-Pacific region. Binh Duong.

It should be noted that, in the 5 focus areas of the National Energy Strategy, Russia has determined to focus on exporting to the Asian market, reducing emissions and developing renewable energy.

Some experts question, with such a strategy, whether Russia is really “up to date” compared to the context that the whole world is turning towards renewable energy.

Tatyana Mitrova – Director of the Center for Energy and Director of the Energy Research Institute of the Russian Federation, Vitaly Yermakov – Doctor of the Oxford Institute for Energy Research gave a critical report on the plan.

The report asks whether, with Russia’s current heavy dependence on hydrocarbons, Russia will be able to compete with the transforming international energy market; Is Russia integrated with the energy transition, advocating renewable energy and reaching for advanced technology.

Besides, whether Russia is ready to compete under the market mechanism or will it maintain centralization and state control as it is today.

Hai Lam


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