Alexey Miller, Chairman of the Gazprom Management Committee, took part in the third roundtable on cooperation in the energy sector organized by China's CNPC as part of the high-level Third Belt and Road Forum for International Cooperation in Beijing.
Alexey Miller highlighted that it is constructive and mutually beneficial cooperation, underpinned by a realistic understanding of the energy sector development, that is now becoming the most topical item on the global energy agenda.
According to experts, global GDP will grow more than twofold by 2050. Economic growth will drive an increase in the demand for energy, which is going to rise by more than 20 per cent by the middle of this century. The significance of natural gas will continue increasing as well: by 2050, its share in the global energy mix will be as large as 26 per cent, and it will become the leader among all other energy sources.
The prospects of the growth in gas consumption are associated mainly with Asia. The main driving force behind this growth will be China with its dynamic and fast-growing economy. Within quite a short period of time, from 2016 to 2022, the demand for gas in China almost doubled, reaching 370 billion cubic meters, i.e. rose by more than 160 billion cubic meters. This is comparable to the aggregate volume of gas consumed in 2022 by Germany and the UK, who are the largest gas consumers in Europe. What is more, expert forecasts indicate that China's gas consumption will show another almost twofold increase in the period to 2040.
The Chairman of the Gazprom Management Committee noted that the Company has the required resources, technologies and competencies to assist China as regards the provision of its growing economy with a reliable and efficient source of clean energy, i.e. natural gas. Gazprom and CNPC are already working in this direction together.
By now, an infrastructure complex of strategic importance that comprises gas production, transmission and processing facilities has been created in the east of Russia. The backbone of the unique complex is the Power of Siberia pipeline, which provides gas supplies to China in a stable manner and regularly in excess of the daily and annual contractual volumes. This characterizes Gazprom as a responsible supplier and shows that Russian gas is in very high demand.
After Power of Siberia reaches its full capacity in the near future, Gazprom will become the largest supplier of gas to China.
A large-scale pipeline system has been built in China for the reception and transmission of Russian gas. As a result of this joint work, the two countries now have the infrastructure that brings clean energy to many consumers – enterprises and households alike – and gives an impetus to social and economic development in the relevant regions.
In 2022, Gazprom and CNPC entered into a long-term contract with regard to another route, the one stretching from the Russian Far East. The contract provides for the delivery of 10 billion cubic meters of gas per year. Design activities for the relevant infrastructure are currently in progress.
Gazprom is also supplying to China liquefied natural gas from Sakhalin Island and from the Portovaya Complex located on the coast of the Baltic Sea. The new option of Gazprom's LNG deliveries via the Northern Sea Route has recently proven its efficiency. The use of this route significantly reduces the time required for LNG shipments to be delivered to the Asia-Pacific region.
Gazprom and CNPC are also discussing another project, pipeline delivery of gas to China across Mongolia in the amount of 50 billion cubic meters.
Alexey Miller highlighted that the cooperation between Russia and China in the gas sector is strategic and mutually beneficial in nature. It facilitates the economic development in the two countries and helps improve the living standards of their population.
It is pipeline routes that are of particular importance in this regard, because pipeline gas will, for many decades to come, securely flow to the places where it is needed by people and industrial facilities.
Pipeline deliveries of natural gas offer a long-term solution for addressing environmental issues, ensure the protection of people's health and preserve the favorable environment. Due to the reduction of carbon footprint, gas already makes a significant contribution to the achievement of climate goals both within the 14th Five-Year Plan of China and under international initiatives.
Pipeline deliveries of natural gas are a matter of high responsibility towards consumers, which, in its turn, is the basis of Gazprom's activities. All business processes in the Company are focused on reaching this goal: the resource base, the production capacities and the gas transmission system have been being developed for decades in such a way as to secure the required deliveries of clean energy to the current and future generations.
Gazprom treats the Company's unique resource base with utmost care and has a responsible approach to its replenishment. Large-capacity production complexes allow the Company to produce as much gas as is required. The unique gas transmission system, which is the longest one in the world, makes it possible to redistribute gas flows in a flexible manner for delivering gas from the fields to houses and enterprises. All of this allows Gazprom to reliably fulfill its obligations to its consumers, which is particularly important during peak demand in winter periods. In any weather conditions, Gazprom remains a reliable partner.
In conclusion, Alexey Miller noted that the prospective gas transmission routes from Russia to China mean more than natural gas deliveries. They mean a true partnership that has a shared vision and mutual respect at its core, a partnership that offers a huge long-term potential for the development for the benefit of the two countries, as well as for the strengthening of the friendship between their peoples.
