The Gazprom Board of Directors took note of the information about the growth prospects of the shale gas and liquefied natural gas (LNG) industries across the world, as well as opportunities and threats facing the Company.
It was highlighted at the meeting that only a few countries were producing shale gas in 2020, with the United States accounting for 95 per cent of shale gas extracted. According to current forecasts, no other country is expected to develop its shale industry at rates comparable to those of the U.S. even in the long term.
Owing to the growing importance of the environmental agenda, shale gas produced with the use of the hydraulic fracturing technology is increasingly considered a “dirty” energy source. As a result, some buyers are abandoning their plans to import LNG from the U.S. while environmentally responsible international companies are selling their shale assets.
In China, the amount of shale gas produced in 2020 ended up a third below the target set by the government due to the complex geological structure of the country's shale fields and the low cost effectiveness of their development.
As for Europe, there are no expectations of shale gas development in the region.
Similarly, Gazprom has no plans to produce gas from shale deposits due to the abundance of proven gas reserves in the conventional fields, the development of which is more efficient from both economic and environmental viewpoints.
With regard to the development of the global LNG industry, it was noted that the dynamics of final investment decisions on new projects have recovered in 2021 against the background of the decision on the expansion of LNG production capacities in Qatar. At the same time, 2021 has seen the postponement of final investment decisions on a number of LNG plants in North America and Africa, along with the cancellation of some LNG production projects.
In 2021, substantial amounts of LNG have been rerouted to premium Asian markets, which has led to a reduction in gas supply across Europe and played a major role in the significant growth in regional prices. The situation observed in 2021 proves that LNG supplies under short-term contracts cannot guarantee energy security for gas importing countries.
In 2020, Russia was the world's fourth largest LNG exporter, with about 40 billion cubic meters of LNG supplied. Thanks to the launch of new projects, including the biggest LNG plant in northwestern Europe, which is located near the settlement of Ust-Luga, and the LNG production, storage and shipment complex situated near the Portovaya CS, our country is going to strengthen its foothold in the global LNG market in the long term. It was highlighted that the development of the domestic LNG industry needs to take state interests into account, prioritizing the supplies of natural gas to Russian consumers and discouraging competition among Russian gas exporters in foreign markets.
The year 2021 has seen the practice of LNG supplies with a zero carbon footprint spreading further. In the current year, the Gazprom Group has delivered from its portfolio two shipments of carbon neutral LNG produced in Russia.
In the future, increasingly large amounts of LNG are expected to be used as a fuel in marine, river, and road transport.
The Management Committee was tasked with continuing to evaluate the development prospects of the shale gas and LNG industries around the world.