Russian gas market development scenario by Vygon Consulting

Russia ranks first in terms of natural gas reserves and, given the fact that the gas chemistry sector is only gaining momentum, many questions arise. In preparation to the CIS Gas Monetization conference, the event organiser Globuc turned to Dmitry Akishin, head of the gas chemical division of Vygon Consulting, to clarify what will determine the development of the gas sector in the next 10-15 years and what factors will have impact on the trajectory of this development.

Petrochemicals is probably the only promising industry, when it comes to growth of gas consumption in the country according to Vygon Consulting. It this interview Dmitry Akishin names two main directions of gas industry development.

In petrochemistry, the potential lies in the additional extraction of “fatty” components of natural gas which will help, among other things, to monetize a resource that does not have access to the market, and also give impetus to the development of Russian gas processing.

Currently, Russia is considering several integrated projects of gas treatment plants and petrochemicals. Much work is being done not only in companies, but also by the state authorities that are actively developing instruments to stimulate the industry.

Gas chemistry has also got its own development perspectives: currently, in the methanol industry alone there are about 15 major projects that can provide demand for 20 billion m3 of gas. They are all focused mainly on export, for which a number of preconditions have been formed.

Firstly, the Russian methanol industry has an important competitive advantage – low cost of raw materials. Secondly, there is a growing demand for methanol across the world, mainly due to China. This trend has persisted over the past few years, and Vygon Consulting expects that the global methanol market will grow by 5-7% per year for the next 7-10 years.

As part of Russian gas processing, the key vector of development will undoubtedly be the deepening of extraction of valuable components, mainly ethane. This direction will go in parallel with the growth of petrochemical facilities. When it comes to gas chemistry, we can also speak about the construction of large-tonnage export-oriented industries.

For both directions, at present, the essential limiting factors are the lack of cheap financing and a rather modest set of tax incentives for large investment projects. Having resolved these issues, the state will be able to receive, in the future, a multiple increase in the production of chemical products in Russia.

Vygon Consulting is a Russian consultancy that specialises in strategic consulting for business, analytical support for public authorities, as well as energy sector research.

For more information about the CIS Gas Monetization conference, please follow this link: https://www.globuc.com/cisgaschem/

Global Business Club Ltd specialises in organising targeted conferences for oil & gas industry.

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This release was published on openPR.