An LNG vessel in Tekirdag, Turkiye on April 12, 2023. ]
Lokman Akkaya | Anadolu Agency | Getty Images
Russia’s role as a global energy player is set to diminish, and the U.S. and Qatar are among a slew of nations ready to fill its shoes, analysts told CNBC.
“Russia’s global LNG supply share will almost certainly decline this decade,” Henning Gloystein, a director for energy, climate, and natural resources at political consultancy Eurasia Group told CNBC. He noted that its role in the liquefied natural gas space was retreating even before the country’s invasion of Ukraine last year.
Western sanctions, which resulted from the onslaught of its neighbor, further sapped most foreign investment out of Russia’s LNG sector.
Russia’s inability to purchase liquefaction modules (which enable natural gas to be converted into LNG) will hamper its ambitions, said the Director of South and Southeast Asia Gas of S&P Global Commodity Insights, Zhi Xin Chong.
“In this decade, it will be extremely challenging for Russia to expand its liquefaction capacity given the broad sanctions that have been imposed on the country,” Chong said in an e-mail.
He added that the total capacity for Russia’s LNG facilities to produce natural gas will remain flat at 37 million tons over the next few years.
By 2030, the total global LNG capacity will grow by 50% to 671 million tons per year — and Russia’s share of this pie is expected to fall to 5% from the current 6.7%, S&P further projects.
In 2021 before its invasion of Ukraine, Russia was the world’s largest gas exporter, as well as the fourth largest LNG exporter after Australia, Qatar and the U.S.
And these countries are expected to fill the gas gap — alongside others.
“We’re going to see much more emphasis on other places like the U.S., Mozambique and Australia,” Chong said.
In the first half of 2022, the U.S. overtook Qatar and Australia to become the world’s largest LNG exporter, according to the Energy Information Administration, citing data from not-for-profit organization Cedigaz.
The Liquefied Natural Gas (LNG) tanker Maria Energy is moored at the Uniper LNG terminal at the Jade estuary in Wilhelmshaven, northern Germany, on January 4, 2023.
Focke Strangmann | Afp | Getty Images
By 2030, Chong expects the U.S. to take up 25% of global LNG capacity, and Qatar to make up 19%.
Eurasia’s Henning also cited the U.S. and Qatar as being the “main beneficiaries” as Russia falls back from the world’s LNG ecosystem.
“New projects and expansions to existing facilities in the U.S. as well as Qatar’s massive North Field expansion have been significantly accelerated as Europe piled into the LNG market last year,” he said.
Asides from the U.S. and Qatar, the Eastern Mediterranean is also on his list as the region is geographically well suited to replace Russian pipeline gas to southern European countries, especially Italy, Greece and Croatia.
“East African LNG including Mozambique and potentially also Tanzania may also benefit,” Henning added.
However, he cautioned that the “window of opportunity is relatively narrow” given Europe’s drive to reduce overall gas consumption through upcoming restrictions on usage and investment in alternative domestic supply sources.
The European Union unveiled a REPowerEU plan shortly after the start of the Ukriane war, with an aim of increasing the share of renewables in final energy consumption to 45% by the end of the decade. This dovetails with the European Climate Law’s long-term decarbonization agenda, Pavel Molchanov, managing director of equity research at investment bank Raymond James, told CNBC via email.
“The expansion of renewable power means that the role of gas, not to mention coal, is diminishing over time,” he said.
19-year-old son charged with murder of parents and 5-year-old brother in Bronx: Police
New York City redesigning thousands of intersections to make them safer for pedestrians
No, Slate, An Eight-Speed Transmission Doesn’t Mean A Car Is Massively Powerful
Dubai: 83% of students enrolled in Indian schools attend those ranked ‘Good’ or higher
Trump already did many of the things critics warn about
Feeding Tampa Bay serves hundreds a traditional meal for Thanksgiving
Peaches, Plums, and Nectarines Recalled Nationwide Due to Listeria Outbreak
39 Black Friday Treadmill Deals to Shop Right Now 2023
43 malls in Massachusetts for all your shopping needs
31 Best Black Friday Mattress Deals You Can Shop Right Now 2023
Elvis’ Maid Said Lisa Marie Presley Didn’t Like Spending the Night at Graceland After Elvis’ Death
Wall Street Watch Out: New Data Show Rising Chance of U.S. Recession
Another Mass. resident charged in Jan. 6 Capitol riot
George Harrison Thought This Elvis Presley Song Included an Incredibly ‘Dumb Line’
Another Taylor Swift course is coming to Boston, this time at Northeastern University
News24 hours ago
Cigna shares slide after report it could merge with Humana
News19 hours ago
The Republicans Who Won’t Quit Trump
Finance21 hours ago
First Horizon Bank BrandVoice: Swift, Secure, Strategic: How To Create A Lightning-Fast Cash Management Plan That Reduces Fraud And Waste
Tech21 hours ago
Nikola Tesla’s historic Wardenclyffe lab site at risk after devastating fire
News21 hours ago
Boston officials exploring guaranteed basic income program
Finance20 hours ago
Fortunes Can Be Made With Bristol-Myers Squibb
Tech21 hours ago
Amazon’s New AI Image Generator Creates an ‘Invisible Watermark’ on Every Deepfake
News21 hours ago
UAE winter: Now, experience snow on Dubai’s rain street