The expected increase in gas consumption in the countries of Eastern Europe opens opportunities for Russia to maintain and ultimately increase the volumes of supply. While the competition to the Russian gas will generally rise due to the appearance of new suppliers and the development of LNG infrastructure. This forecast is made by the experts of the Analytical Center in the new Energy Bulletin "The Demand for Gas in Eastern Europe".
According to the experts, gas consumption and imports in the region are expected to grow in connection with making the economy more eco-friendly (primarily this is the case for "coal" countries — Poland and the Czech Republic) and meeting the growing needs of the economy (plus 2-3% per year until 2023). In addition, the countries of Eastern Europe perform a transit function, as they are located between the largest centers of gas production (Russia, Middle East) and consumption (Western Europe). Heat and electric power sectors in the Czech Republic and Hungary will also increase the demand for gas. The transition to gas for heating and domestic needs will cause the demand for it in Bulgaria and Serbia. In Slovakia, gas consumption will increase due to the country's transition from coal to gas. In Poland, consumption will be almost steady.
One of the most important goals of the state policy of all the countries of Eastern European in the gas sector is to ensure their energy security, the authors of the bulletin note. It is planned to accomplish this task by diversifying the sources and routes of natural gas supply. Thus, in the future, gas supplies to Turkey and Bulgaria may be ensured among other things by its purchase in Algeria, Egypt, Iraq, Qatar, UAE, Oman, Turkmenistan, the countries of the Eastern Mediterranean region, the Caspian region and Africa. Hungary and the Czech Republic are also considering a possibility of gas supplies from LNG terminals in Poland, Croatia, Slovenia and Northern Italy, while Bulgaria and Hungary are contemplating participation in the Southern Gas Corridor project.
The experts noted that the trade conflict between the US and China opened up opportunities for Russia to insert itself into the vacated market niches. The introduction of bilateral sanctions creates a number of "bottlenecks" in the energy sector for China and especially for the United States, the authors think. As a result, their trading partners, including Russia, will have opportunities to insert themselves into the vacated market niches. But global energy markets are moving towards a higher degree of globalization, and due to the development of opportunities to switch between partners, the effects of bilateral constraints will play a smaller and smaller role for the global environment: suppliers from the US may find a place in another point of the global market.
Read more in the Energy Bulletin "The Demand for Gas in Eastern Europe".
For other bulletins, see the Publications section.