Vladimir Putin at the plenary session of the Russian Energy Week. Main

Russian President Vladimir Putin spoke at a plenary session at the sixth Russian Energy Week (REW-2023) in the capital’s central exhibition hall “Manege”. He outlined four key elements of the transformation of the Russian fuel and energy sector, which are fundamental in nature and are part of Russia’s sovereign strategy.

The head of state began his speech with an assessment of Russia’s cooperation in the energy sector. In Russia, the geography of foreign trade in energy resources, employment parameters and the industry picture are changing. “Completely new market prospects are emerging for small and medium-sized businesses,” he noted.

The program for social gasification of Russia has started in 2021, Putin recalled. According to him, more than 375,000 households have already received access to gas.

“Last year, we agreed to make the program unlimited. Moreover, we expanded it to clinics, hospitals and schools, where heat supply can be switched to natural gas,” the president added.

Putin proposed expanding the list of citizens eligible for subsidies for gas equipment – in addition to large families and low-income people, it is proposed to include in this list participants in the special operation, their families, as well as disabled people of group I and families.

It is planned to include the Power of Siberia and Sakhalin – Khabarovsk – Vladivostok gas pipelines into the unified gas supply system. “A gasification project for the Kamchatka Territory using LNG has been launched. And the Murmansk region and Karelia will receive gas from the Volkhov-Murmansk-Belokamenka gas pipeline,” the president said.

Last year, Russia recorded a record amount of energy consumption and there is reason to believe that this year it will be updated. “There is no need to talk to specialists here. If energy consumption grows, then the economy grows. Actually, this is confirmed by other data,” Putin added.

The President recalled that plans have been drawn up to update the electrical grid in those regions where the issue is most acute – in about 10 constituent entities. All programs must be fully funded.

The key condition for the confident development of the energy market is stability and affordability of prices for electricity, raw materials, and fuel. “I would like to once again draw the attention of our leading energy companies. Priority should be given to fuel supplies to domestic consumers. In turn, I ask the government to act more quickly and take preventive measures,” Putin warned.

The second strategic task of the Russian fuel and energy complex is to create maximum added value and develop deep processing of oil and gas, Putin added. According to him, Russia has already made serious progress in this area.

The third direction of the structural transformation of the fuel and energy complex is the formation of complete sovereignty of the industry: technological, personnel and financial. Putin noted that projects in the industry are increasingly based on domestic equipment and software. “We have to radically increase the share of Russian equipment, especially critically important ones. Bring the training of qualified personnel to a new level. And, of course, to form our own mechanisms for financing investment projects,” Putin added.

The fourth direction is related to new prospects and export geography. Putin recalled that European countries are trying to completely abandon Russian energy resources, which ensured the well-being of the European Union. However, according to the president, as a result of these decisions, the EU economy is at zero, industrial production in the Eurozone has been in the negative zone since March (only +0.5% growth due to Italy and Spain) – minus 2.4%, energy production – minus 4.7%. “Well, this is reflected in the income of the population, the real disposable income of the population in the Eurozone, in the first quarter of this year, quarter to quarter of 2022 – minus 1.2%,” the president added, noting that in Russia there is an increase in real income of the population.

The Russian President also pointed out that the politicized steps of Western elites are affecting the entire global economy, which now has to be corrected. “For the stability of the oil market, interaction between the main suppliers is necessary on open, transparent terms. It is in this logic that Russia works with partners within OPEC+. <…> OPEC+ member countries fully fulfill their obligations and successfully cope with all challenges,” Putin added.

During his speech, Putin noted that liquefied natural gas occupies an important place in the global energy market, since its supply can respond more flexibly to changes. “Next year, terminals for receiving LNG will operate in 55 countries, and according to estimates, by the end of the decade, demand for LNG in the world may increase by about one and a half times – up to 600 million tons per year,” Putin said.

Putin also emphasized that Russian gas exports to China are developing and that by 2025 the Power of Siberia gas pipeline will reach its design capacity of 38 billion cubic meters. m per year. “But already today deliveries on it constantly exceed the volumes of contractual obligations. Last year, a contract was signed on another route to China, the Far East,” the president said. According to the latter, the supply volume will be 10 billion cubic meters. m of gas per year.

“Of course, Russia, as before, will make a significant contribution to balancing the global energy market, developing partnerships and cooperative ties with those countries that want this and are interested in this,” the president emphasized.