Novak announced an increase in Russia’s share in the global LNG market

And he started talking about lifting the ban on diesel fuel exports

Oil production in Russia will decrease this year, but coal production will remain almost unchanged. At the same time, our country’s share in the global liquefied natural gas (LNG) market will increase to 20% by 2030. These key parameters for the development of the fuel and energy complex (FEC) of our country were announced at the plenary meeting of the Federation Council on November 22 by Deputy Prime Minister Alexander Novak.

What attracted the most attention in Novak’s speech to senators was his statement about the government’s readiness to lift the ban on the export of diesel fuel due to the fullness of the domestic market. Let us recall that due to a record increase in exchange prices for hydrocarbon derivatives, the government had to introduce restrictions on the export of petroleum products on September 21. State Duma Speaker Vyacheslav Volodin then cited the shortage of fuel for agriculture as the main reason for this step, which threatened to disrupt the harvesting campaign and sowing work. Moreover, the restrictive measures did not have an effect immediately, and Russian President Vladimir Putin joined the discussion of the situation at the end of September. “Measures have been taken, but prices are rising!” – he was indignant at a meeting with the government, calling on the Cabinet of Ministers to respond more quickly to what was happening.

Everyone heard the head of state: the situation began to improve. As a result, on November 17, after prices stabilized, the authorities lifted the ban on the export of gasoline. And a week later, forecasts about further easing were heard from the high stands. Thus, the day before, Energy Minister Nikolai Shulginov said that the issue of lifting the ban on the export of summer diesel fuel is now being decided. At the same time, no such solution is planned for the winter. Novak also confirmed the general intention of the government in the Federation Council. “Today the market is balanced, prices are stabilized,” he noted. “In the near future, I think that decisions will be made to lift the complete ban on the export of diesel fuel.” Commenting on the development of exchange trading in fuel, the Deputy Prime Minister also emphasized that work is underway to simplify its delivery, including with Russian Railways, and measures are also being taken to eliminate the possibility of market manipulation, since “exchange trading is electronic in nature.” Such statements give hope that the government was able to restore order and that the situation that arose at the end of summer with prices for hydrocarbon products in Russia will not repeat itself.

At the same time, the country’s domestic market is fully supplied with fuel, the Deputy Prime Minister assured. This happened, among other things, due to the modernization of oil refineries. They were able to saturate the Russian market with high-quality fuel and in the future there will be even more of it, since the country plans to reconstruct and put into operation 50 fuel production plants. And in total, up to 1 trillion rubles will be invested in the modernization of refineries by 2028. “The commissioning of these capacities will allow us to increase the production of fifth-grade motor gasoline by 4 million tons per year and diesel fuel by 30 million tons, respectively,” Novak noted.

At the same time, in 2023, oil production in Russia will decrease to 527 million tons, and coal production will remain almost unchanged – 440 million tons. The volume of gas produced will decrease by 3 billion cubic meters compared to 2022. It is curious that Novak did not comment on the decrease in oil production, but explained the decrease in gas volumes by saying that in the first half of last year, deliveries via Nord Stream were still going as normal, but stopped completely in September 2022. Accordingly, hence the decline, although Chinese exports through the Power of Siberia pipeline will partially cover these losses. But LNG production in 2023 will increase to 33 million tons, electricity – to 1.15 trillion kW/h, the Deputy Prime Minister noted.

Novak also paid attention to technological sovereignty, which the government of our country is actively seeking. “Over the past 10 years, we have managed to reduce the industry’s import dependence from 67% to 38%,” he said. In 2024, Russia plans to increase LNG supplies to other countries. This will become possible thanks to the launch of new Arctic gas liquefaction projects. The Russian government has set a task to increase the production of liquefied natural gas from 33 million to 100 million cubic meters by 2030, due to which Russia’s share in the world market will reach 20%. The key sales markets, taking into account the “closure” of Europe, will be Asian countries, the Deputy Prime Minister emphasized.