Novak wrote an article for “Energy Policy” about the turn of energy to the East

Deputy Prime Minister Alexander Novak wrote an article for “Energy Policy” about the turn of Russian energy to the East. In his opinion, this is demonstrated by a multiple increase in energy supplies, as well as forecasts. In addition, the Deputy Prime Minister said that the Russian Federation is discussing with friendly states the creation of a “new system of clubs for mutual insurance and reinsurance of risks to third parties” for unhindered access to Russian oil.

How, according to Mr. Novak, there is a turn to the East:

• The West will receive in 2023 40% of oil and oil products from previous volumes – 87 million tons instead of 223 million tons;
• As early as May 2022, oil supplies from the Russian Federation to Asian countries exceeded exports to Europe for the first time. The growth of oil exports to friendly countries amounted to 76%, oil products – 20%, pipeline gas and LNG – 8%;
• oil exports to India increased 19 times, to 41 million tons, oil products – twice, to 6.2 million tons, coal – three times, to 20 million tons;
• LNG supplies to China increased by 35.2%, to 6 million tons, pipeline gas – by 1.5 times, to 15.4 million cubic meters, coal – by a quarter, to 67.1 million tons, oil – by 28%, up to 89 million tons. China exported a record 4.7 billion kWh of electricity;
• Rosneft confirmed the transportation of 30 million tons of oil via the Skovorodino-Mohe pipeline;
• new LNG plants in Yamal will ensure production at the level of 100 million tons by 2030;
• Russia is considering options for cooperation with Thailand in the field of exploration, production of hydrocarbons, LNG projects;
• Transneft plans to expand the capacity of main oil pipelines by 32 million tons. A total of 600 km of pipelines will be built;
• the participation of Vietnam in the development of the Severo-Purovskoye field is discussed;
• Vietnam will import 50-83 million tons of coal per year in 2025-2035;
• more than 20 applications were received “from various countries, primarily Asian”, for the supply of oil, oil products and LNG;
• a significant part of the calculations is carried out in rubles, yuan and rupees.

Mr. Novak believes that the Asia-Pacific region will become the main consumer of energy resources in the world for at least 30 years. Most of it will come from traditional energy sources. Russia will expand the resource base of the Far East, since “the increase in demand will largely be provided by deposits that are as close as possible to consumers in the Asia-Pacific region.”

According to Moscow’s expectations, gas exports to the East by 2030 will increase fivefold by 2021, to 170 billion cubic meters. The growth in oil demand in the world in 2023 will be 2.3%, mainly due to Asia. It can reach 101.9 million barrels per day (+ 2.3 million). Asia-Pacific countries will account for 1.6 million. Russia also predicts an increase in demand for coal in India, Southeast Asia, the Middle East and Latin America until 2050, despite a decrease in the need for global consumption by 14% by 2030 and by 49 % by 2050.

Alexander Novak assured that now the government is making significant efforts to develop energy infrastructure in the Asia-Pacific countries, build up a friendly fleet and create financial infrastructure, including a system of payments and insurance. “A mechanism is also being worked out for the sale of not only energy carriers, but also services for their delivery to the end consumer,” he added.

The government believes that the new system of mutual insurance clubs and reinsurance of risks to third parties in the supply of oil, which is currently being discussed, will not be dependent on Western countries and will not be subject to sanctions risks. According to Mr. Novak, in an alternative system of cargo insurance, there is the potential to use a bank guarantee instead of insurance to cover the liability of cargo carriers.

How the World Economic Forum assesses the potential for Russia to increase hydrocarbon exports to Asian countries – in the publication “Kommersant” “Bitter smoke of the fatherland”.