"With the rapid entry of new capacity around the world, there are fears that the gas market will be developing according to the oil market scenario: oversupply in the market will lead to falling prices," stated the Analytical Center expert Alexander Kurdin to the Rossiyskaya Gazeta correspondent.
Gas Market May Develop Under the Oil Market Scenario
Two new gas clusters will be created in Saint Petersburg. The first one will be intended for production of natural gas liquefaction equipment, and the second one will constitute a transportation and raw materials combination of high-tech solutions for the development of the offshore Arctic gas resources. The main purpose of their creation is import substitution in the sphere of gas production and liquefaction, writes the publication. According to forecasts, deliveries of Russian gas to European consumers will only be increasing in the coming years, and it is also necessary to take into account the growing Chinese market.
"Sustained economic growth in Europe and the continued reduction of domestic natural gas production in the EU have become important factors in the increase of the exports of Russian natural gas," Analytical Center expert Alexander Kurdin said, speaking at the 7th Saint Petersburg International Gas Forum in the beginning of October. In his opinion, the format of natural gas contracts in Europe and Asia is going to depend on whether or not customers can switch between suppliers and suppliers can switch between customers. "If competition increases, a shift towards shorter term contracts with minimal mutual guarantees and free competitive prices is inevitable," the specialist believes. The competitiveness of Russian exports of natural gas also depends on the state of competition in the domestic market as that would drive competitive incentives for Russian natural gas producers, Mr. Kurdin noted.
Source: The Rossiyskaya Gazeta