Russia told to keep competitive with US shale gas output
Russian President-elect Vladimir Putin urged energy producers from the world’s biggest natural gas exporter to “rise to the challenge” of a changing market as the US increases output of shale gas.
US shale gas production may “seriously” restructure supply and demand in the global hydrocarbons market, Putin said today in an address to the Russian lower house of parliament, according to Bloomberg.
The US overtook Russia as the biggest producer of gas in 2009 as it extracted fuel trapped in shale rocks. That has cut prices and led nations from China to Poland to explore for such resources, potentially cutting their reliance on Russian gas.
Russia’s biggest gas producer, Gazprom, has played down the threat of US competition and said the gas industry will benefit from the shale boom. The Moscow-based exporter is seeking to join a US project to liquefy the fuel for shipment by tanker, Frederic Barnaud, LNG executive director at the company’s London marketing unit, said last month.
The US plans to be a net exporter of LNG from 2016, with initial sales of 1.1bn cubic feet a day doubling after three years.
Exports may begin in a decade, Gazprom Deputy Chief Executive Officer Alexander Medvedev said in February.