On October 5, the key event took place at the 7th St. Petersburg International Gas Forum as the plenary session "The Role of the Russian Gas Complex in the World Energy Balance" welcomed the Forum participants.
The attendees of the session — representatives of government and business, scientists, fuel company executives — greeted the Governor of St. Petersburg Georgy Poltavchenko. He remarked that in June 2017, at St. Petersburg International Economic Forum, St. Petersburg and Gazprom signed two important agreements: the agreement on creation of LNG production equipment and solutions cluster and the agreement on creation of transport and raw material high-tech solutions cluster for the development of resources of the World Ocean and the Arctic.
"It is for a good reason that St.Petersburg is chosen for these initiatives – the city has a huge intellectual potential, and can produce innovative products within short timeframes. We carry out the most important tasks set by the President of Russia Vladimir Putin — the development of the Arctic zone and the development of shelves," – stressed the head of the city.
According to him, today more than 80 enterprises of St. Petersburg are Gazprom's suppliers. "Made in St. Petersburg" has always been a trade mark standing for high quality. The city has a chance of playing a significant role in the LNG market and offshore projects.
"For St. Petersburg, as well as for all regions, ensuring the supply of natural gas is a guarantee of safety and well-being", – he said.
On behalf of Alexey Miller, Chairman of the Management Committee of Gazprom, Deputy Chairman of the Management Committe of Gazprom Alexander Medvedev congratulated the participants on the opening of the 7th St. Petersburg International Gas Forum. The Forum became part of the Russian Energy Week, which began on October 3 in Moscow with a panel session with participation of Russian President Vladimir Putin.
"Our task is to discuss the prospects of gas, which is currently used by 6 billion consumers, to think about environmental safety and public benefits," – stressed the moderator of the meeting, Head of the consulting company Lambert Energy Philip Lambert. According to him, two myths are widespread in Europe that have a negative impact for Gazprom: first, the view of gas as a "dirty source", which is often put on a par with oil and coal; and secondly, "insecurity" of gas, despite gas supplies from Russia to Europe having been continuously going on for the past 50 years accounting for record-breaking supply volumes (190 billion cubic meters) in 2017.
"Russia occupies a unique position: the share of natural gas in the country's energy balance is 52%, whereas the share of coal is 13%. You can assert a strong position and have important things to say, but it is highly significant to be heard ", – the expert added and encouraged Russia as one of the most reliable gas suppliers in the world to speak out "the truth about natural gas" and actively cooperate with partners.
The Minister of Hydrocarbons of Bolivia, Luis Alberto Sánchez Fernández spoke about the situation in the gas industry in the country and in Latin America in general, where there is an industry growth of 4% per year. In Bolivia, gas plays an important role: there are about 3.5 million players in the sector, the production market has grown from 4 million to 15 million cubic meters per year.
"In Latin America, supply significantly exceeds demand, with this gap in Bolivia exceeding 60%. We live in a transitional period, but gas remains a clean energy. We are increasing competitiveness and by 2020 we expect to increase gas exports up to 100 million cubic meters," – he said.
The minister said that despite the low share of Bolivia in the gas market, the country is reducing the "hydrocarbon footprint": it has plenty of trees and is conducting research and protects environmental zones, some of them located near development fields. The expert told the audience how the South American continent countries preserve the notion of "mother earth" and stressed that Latin America should be perceived as an important player in the energy market.
Deputy Chairman of the Management Committee of Gazprom Alexander Medvedev spoke about the role of natural gas in the global energy balance and prospects for its use.
"The balance relies on the three pilars: competitiveness, safety and systainability. These factors are incorporated in the strategy of Gazprom as the world's largest gas producer and export company," – he said. Recently, Gazprom Corporation took the lead in the global rating of S&P Platts Top 250 energy companies for the year 2017 with the best profit indicators. Gazprom has taken away the leadership from the US ExxonMobil, which has been staying at the top for 12 years.
A. Medvedev spoke about the changes in the global energy emphasizing the growth of gas consumption and higher responsibility for the environment: "We are approaching the peak demand for oil, and the demand for gas will be growing at an increasingly higher pace for decades. In Europe, with Gazprom being the key supplier, the gas market has been growing for the third consecutive year. In the first six months of the year, consumption growth has made approximately 6%, imports has increased by more than 22 billion cubic meters. Over 2016-2017 gas imports will amount to about 60 billion cubic meters, which is comparable to the capacity of the North Stream 2. If demand is growing at the same rate, we will soon be falling short of the target having only this project alone operating as a major supplier."
According to the expert, Gazprom is currently the only supplier capable of providing Europe with the sufficient amount of gas at any given time, and the North Stream-2 gas pipeline going under the Baltic Sea, to start operation in 2019, is a reliable and viable replacement of old facilities directly connecting the coast of Russia and the EU countries. In its turn, in the south, the Turkish Stream is targeted at the Turkish market important for Russia.
The expert spoke about the development of the liquefied natural gas industry, which is not only a short- term trend but accounts for a "fundamental" demand with natural gas seen as "the fuel for the transport industry of the 21st century".
"Russia is the energy bridge between Europe and Asia, and we are now paying great attention to Asian markets, in particular, China as our strategic partner – one of the world's largest gas engine markets. Natural gas will allow us to respond to the challenges facing the world's energy sector. I hope that the analysis of the world's energy balance will not only be used in forecasting, but will also be applied for the purposes of management," – said A. Medvedev.
Chairman of the Executive Board of OMV AG Rainer Seele spoke of his vision of the situation in the energy sector, stressing that Europe will have to give up coal in favour of gas and renewable energy sources.
"The use of coal is contrary to the objectives of the European Union, altough its use makes for 20% in the total energy balance and accounts for 40% of environmental pollution. The use of coal is unacceptable," – he emphasized.
The expert emphasized the cases of organisations going beyond their powers and cases of the European Commission's lack of attention to some projects. In particular, the North Stream-2 project fully complies with the norms and laws of the EU, but it was only last week that it was decided to establish an interstate commission for it.
"Demonization of Russia does not bring benefits and is at odds with our principles. Europe has been able to cope with the cold of the previous winter only thanks to Gazprom, – he said, stressing that Europe should focus on the free market, especially the LNG sector.
CEO, Member of the Executive Board, Deputy Chairman of the Board of Directors of Uniper SE Klaus Schäfer outlined the changes in the European market – the largest consumer market for Russia. For instance, there is a serious reduction in the production of nuclear energy, nuclear potential and coal, with natural gas remaining the cleanest source of energy.
"Liquefied natural gas is an attractive solution for transport, including see transport. The participants of the "Blue Corridor" rally have come all the way from Lisbon to St. Petersburg in LNG-driven vehicles showing us a vista of future prospects!" – he noted. According to him, there is a transition from a hydrocarbons era to a gas era, when it is important to foster environmental legislation and initiatives, support the "North Stream-2" and prioritize the gas market.
Executive Director for Gas Business and New Energy, Member of the Executive Committee of Royal Dutch Shell Maarten Wetselaar gave a retrospect of the 125-year history of cooperation between Shell and Russia, which set out in 1892 as the company's tanker transported kerosene from Russia through the Suez Canal. In the same year, the Norwegian skater set a world record, which is now antique.
"Every year, athletes are getting faster, and our industry can learn a lot from sports. In sports, in order to win you need the right circumstances – the same is in the oil and gas industry. You have to give your heart, to invest yourselves into it, adapting to changes," – the expert said.
The demand for gas is growing, and over the past 50 years, Russia has been supplying gas to Europe for 18262 days, with only 14 days with supplies cut, said M. Vetselaar. On behalf of Europeans, he thanked Russia for helping Europeans to cope with the winter.
"Russian gas is good or very good, but one has to think like athletes do, because competition will be increasingly tough. It is important to get across to customers that gas is a clean source," – he said.
Summing up the meeting, the moderator thanked the participants of the session and noted that gas should play an increasingly important role in the world energy.