Gas in Russia

Recoverable reserves41.1thousand Mtoe

Production576Mtoe per year

Production ratio71years

Russia holds the largest natural gas reserves in the world, and is the largest producer and exporter of dry natural gas. The majority of these reserves are located in Siberia, with the Yamburg, Urengoy, and Medvezh’ye fields alone accounting for about 45 % of Russia’s total reserves. In 2011 Russia was the world’s largest dry natural gas producer (23.6 Tcf), regaining its status as the world top producer after trailing U.S. production in 2009 and 2010.

Russia is also the world’s largest exporter (7.2 Tcf). The state-run Gazprom dominates Russia’s upstream, producing about 80 % of Russia’s total natural gas output. Gazprom also controls most of Russia’s gas reserves, with more than 65 % of proved reserves being directly controlled by the company and additional reserves being controlled by Gazprom in joint ventures with other companies.

Natural gas associated with oil production is often flared. According to the U.S. National Oceanic and Atmospheric Administration, Russia flared an estimated 1,244 Bcf of natural gas in 2010, the most of any country in the world. At this level, Russia alone accounted for about 30 % of total volumes of gas flared globally in 2010. The Russian government has taken steps to reduce natural gas flaring and set a target of 95 % utilization of associated gas by the end of 2012. However, given current the volume of gas flared, it is unlikely companies will achieve this target.

Russia exports significant amounts of natural gas to customers in the Commonwealth of Independent States (CIS) –about 35 % of total exports. In addition, Gazprom (through its subsidiary Gazexport) has shifted much of its natural gas exports to serve the rising demand in countries of the EU, as well as Turkey, Japan, and other Asian countries. About 70 % of Russia’s non-CIS exported natural gas is destined for Europe, with Germany, Turkey, and Italy receiving the bulk of these volumes. The remainder of Russia’s European gas exports are sold to the newest EU members such as Czech Republic, Poland, and Slovakia. In addition to dominating the upstream, Gazprom dominates Russia’s natural gas pipeline system. There are currently nine major pipelines in Russia, seven of which are export pipelines. The Yamal-Europe I, Northern Lights, Soyuz, and Bratrstvo pipelines all carry Russian gas to Eastern and Western European markets via Ukraine and/or Belarus. These four pipelines have a combined capacity of 4 Tcf. Three other pipelines –Blue Stream, North Caucasus, and Mozdok-Gazi-Magomed –connect Russia’s production areas to consumers in Turkey and Former Soviet Union (FSU) republics in the east.

Russia is an exporter of liquefied natural gas (LNG). The majority of the LNG has been contracted to Japanese and Korean buyers under long-term supply agreements. In 2011, Sakhalin LNG exports went to Japan (69.5 %), South Korea (25.7 %), China (2.4 %), Taiwan (1.7 %), and Thailand (0.6 %). The Sakhalin Energy’s LNG plant has been operating since 2009 and it can export up to 10 million tons of LNG per year on two trains. There are a number of proposals in various stages of planning and construction for new LNG terminals in Russia, including: Yamal LNG, Shtokman LNG, Vladivostok.

Note

Gas data represents natural gas only, for unconventional gas please refer country notes within the WER 2013 report gas chapter.