Russian fuel gas supply to Europe can be diverted to the Asia-Pacific regio

Moscow/Beijing: The United States and Europe are trying to ban Russian fuel against the background of the Ukraine war. A few days ago, the European Union even moved a proposal to stop crude oil imports from Russia. Europe has expedited moves to increase procurement of fuel gas from the United States, Gulf countries and Africa to create an alternative for the Russian fuel gas. But while these moves are gaining momentum, indications are that Russia, too, has started exploring alternative markets for its fuels. A Russian analyst claimed that the fuel gas that is currently supplied by Russia to Europe could be diverted to countries in the Asian continent.

Last month, on the 14th of April, Russian President Putin held an independent meeting of the energy department. During this meeting, President Putin had appealed that efforts should be made to increase the supply of fuels to Asian countries. President Putin had said, ‘There is a possibility of reduction in the fuel supplied by Russia to the western countries, in the coming times. Therefore, there is a need for Russia to change its fuel supply pattern. The focus of the Russian fuel supply should be slowly diverted to the fast-growing economies in the Asian continent.’

Analysts and experts point out that the Russian companies have initiated moves in the direction shown by President Putin. Ivan Timonin, a leading analyst at Vygon Consulting, claimed that Russia could divert the entire fuel supplies to the Asia-Pacific region. He pointed out that Russia will need major development and huge investments in infrastructure. The demand for fuel gas has increased by 160 billion cubic metres in the Asian market, and the demand from this sector has reached 50% of the global demand for fuel gas.

Russian analysts advised that as an alternative to the European market, there is a need to pay more attention to the Asian countries as a developing marketplace. Timonon appealed that Russia should take quick decisions for investment and new projects. In 2021, Russia produced 762 billion cubic metres of fuel gas. Out of this, 250 billion cubic metres of gas was exported. 150 billion cubic metres was exported to the European countries. The remaining exports were to India, Japan, China and other Asian countries.

China is the biggest customer of Russian fuel gas. In 2021, China purchased 16.5 billion cubic metres of fuel gas from Russia. At the beginning of 2022, Russia and China signed an agreement for a new gas pipeline with a capacity of 50 billion cubic metres. The capacity of the first pipeline, ‘Power of Siberia 1,’ has a capacity of 38 billion cubic metres. Through these gas pipelines and ship containers, Russia will be able to supply 100 billion cubic metres of fuel gas by the year 2030.

Experts and analysts are appealing, ‘But China cannot be the only alternative for Russian supplies to Europe. Russia needs to focus on other countries, including India.’