This publication by the Analytical Center for the Government of the Russian Federation provides an overview of resources, extraction, processing, domestic consumption, and exports of oil, natural gas, coal, petrochemical products, and electricity, gives infographics, and analyzes the investment climate in these sectors in Russia over the last decade.

Already grappling with a supply glut in liquefied natural gas (LNG), global gas companies face fresh challenges due to two seismic events: the COVID-19 pandemic and the global oil price shocks. Together, these developments are set to deepen and lengthen the current imbalance between supply and demand in LNG markets, leading to a lower-for-longer price environment. As a result, up to 8% of global LNG demand could be at risk (more than 25 million tonnes per annum, or MTPA) in the near term while the low-price environment could last another one to two years.

The call of economic growth and economic development requires diversification of different types of fuel used in car industry, marine and railway transportations. By the volume of stocks, maturity of technology, influence on ecology, self-cost for final customers gas fuel has a lot of advantages in front of hydrogen fuel and electrical engines and gas fuels can be most demanded fuel for the nearest decade. Low cost can be the basis for economic growth compensating growing cost of petrol and diesel fuel. Additional positive effect is safety for ecology. Major problems the industry of gas fuel encounters are in poor infrastructure, insufficient legislation and high cost of gas engines. Future development of gas fuel industry is only possible with state-based subsidiaries with priority to development of infrastructure.

This analytical report is prepared by the Oxford Institute for Energy Studies. The objective of the paper is to define the most important factors shaping natural gas demand in Russia’s electricity and heat sectors, to analyze the extent of their impact, and to reach conclusions on long-term natural gas demand for electricity and heat production up to 2035.