V. A. MATVEEV

Candidate of Economic Sciences Institute of the Far East of the Russian Academy of Sciences

Keywords: Russia, China, gas market, Fukushima nuclear power plant accident

The global gas market is currently undergoing significant developments, leading to strong price volatility in the leading regional gas markets*. This is the emergence of new centers for the production of liquefied natural gas (LNG), a sharp increase in shale gas production in the United States, etc. At the same time, it seems that significant shale gas supplies will compete with LNG and pipeline gas in the global market in the medium term, which, as a result, will have an impact on the volume of cross-country gas trade and on its sales prices. We believe that the contract signed by Gazprom and CNPC in Beijing in May 2014 for the annual supply of $ 38 billion to China will also have a significant impact on price movements in regional gas markets. ^m3 of natural gas for a 30-year period.

It is known that as a result of the Fukushima nuclear power plant accident (11.03.2011), there was a sharp jump in prices for LNG imported to Japan, which provoked a general increase in LNG prices in Asia. This caused a reorientation of LNG supplies from the Persian Gulf countries to the Asia-Pacific region (APR), with a corresponding reduction in the supply of LNG to Europe.

Such fluctuations in prices on the global gas market directly affect China's energy security, both in terms of covering the growing shortage of energy resources in China, and the need to improve energy efficiency, product competitiveness, and environmental safety of the national economy.

China's continued steady pace of development increasingly exposes the insufficiency of its own energy resources to maintain the positive dynamics of economic growth in the country. Therefore, the persistent interest of Chinese oil and gas companies in energy resources in the Middle East, Central Asia, Latin America, and Africa is not surprising. Moreover, the interest in the energy resources of the eastern part of Russia is justified.

Even during the implementation of the 11th five-year plan (2006-2010), it became clear that in order to implement it and build a "small prosperity" society, it was necessary to ensure a corresponding increase in energy production. It was obvious that the high rate of development of the Chinese economy was not supported by the corresponding development of the fuel and energy complex.

Until recently, China mainly relied on its own sources of energy resources (coal and oil, in terms of production of which it ranks 4th in the world). However, back in the 1990s, there was a shortage of oil, and in the years of the 11th five-year plan-of coal and natural gas. Therefore, there is a growing need to diversify imported energy sources.

In addition, the continued urbanization of the country and the expansion of the fleet of personal vehicles make it necessary to pay more attention to the problem of choosing the type of fuel used for electricity generation, thereby preventing an abrupt increase in atmospheric pollution. Environmental problems are growing and causing increasing concern in China, both among the population and in the country's leadership. Big cities like Beijing and Shanghai, due to their rapid development, continue to set new records for the level of pollution. Thus, this issue is beginning to play an increasingly important role in the debate over the country's development.

Therefore, China has been implementing solar and wind energy programs for several years now, and is developing a construction plan.-

* Volatility - a statistical financial indicator that characterizes price variability. It is the most important financial indicator and concept in financial risk management (approx. ed.).

The Company is building a large fleet of nuclear power plants and, first of all, expanding the supply of natural gas, which is known to be the most environmentally friendly of all hydrocarbons.

In addition, demand will grow both in quantity (due to the increase in the country's population) and in quality: the demand for equipment that consumes a lot of energy (household appliances, computers and mobile devices, cars) increases annually. In this perspective, gas is an excellent solution for generating electricity, from the point of view of maintaining a balance between the relentless growth of demand in a country with more than a billion people and the issues of supply stability and the development of the national economy. Thus, gas seems to be the most logical solution for China, and Russia becomes an almost inevitable partner.

With the widely declared improvement of the living standards of the population by the Chinese authorities, the continuation of the country's urbanization and the reduction of the severity of environmental problems, which is embedded in the model of further development of the country, the problem of energy scarcity will continue to worsen. Insufficient supply of energy resources in the country and a shortage of the most valuable energy sources (oil and gas) can hinder the solution of such important tasks as building a "middle-income society" by 2020 and ensuring the country's sustainable development strategy. Moreover, according to recent estimates by the International Energy Agency (IEA) and the British company Wood Mackenzie, by 2020 China will be forced to import about 66% of the oil it needs [ 1]. This is an extremely high indicator of the country's dependence on global oil supplies.

In this regard, meeting the needs of the Chinese national economy with full energy resources is becoming one of the most important factors determining its foreign policy strategy. And here such an efficient energy carrier as natural gas plays a fundamentally important role.

China has significant natural gas reserves, but there are serious problems that hinder the sustainable development of the country's gas industry. Among these problems, the main ones, according to Chinese experts, are the territorial disunity of resources and the predominance of relatively small-scale deposits. In addition, most of the deposits are located at a considerable distance from potential sales markets and have difficult production conditions. Ultimately, the high costs of gas production and transportation to the main consumption areas in the east of the country determine the need for high final gas prices. Under these conditions, effective gas consumption is available only for high-value industries-chemical, energy, etc. Therefore, for a number of sectors of the economy, gas prices are subject to direct price regulation by the authorities.

Be that as it may, the demand for natural gas in China continues to grow at a high rate. Sustained and ever-increasing interest in the development of the gas industry is associated not only with the constant growth of gas consumption in the electric power industry, but also with the implementation of policies to improve environmental protection and the corresponding transition of the industry to more environmentally advanced technologies. An additional impetus to the widespread use of gas is provided by the implementation of the program guidelines of the Chinese state authorities aimed at improving the quality of life of urban and rural residents, which is to some extent associated with the transition from coal to gas in the municipal sphere of settlements. All this implies intensive growth of gas consumption in the medium term.

An urgent government response was needed to stabilize the supply of energy resources, not only in the light of long-term energy challenges, but also due to force majeure circumstances that often arise in the national economy during the winter period due to a shortage of electricity.

In recent years, sharp cold snaps during the winter months have caused disruptions in the rail supply of coal to power plants in Northern and Central China. At the same time, the existing capacity of the main gas pipelines from the production sites to consumers does not allow to provide gas supply to power plants in the required volume. There were cases when the situation in some areas became simply catastrophic during the winter months.

In this regard, there is an urgent need to make adjustments to the Program of development of the country's gas industry in the direction of large-scale construction of reserve capacities.

If until now the emphasis was placed on the construction of large gas transmission lines: West-East-1, West-East-2, Turkmenistan-China, as well as the construction of terminals for receiving liquefied natural gas (LNG), then the construction of gas pipelines in the gas sector became an additional priority of the 12th five-year plan (2011-2015). storage facilities and finally signed a contract for the construction of a gas transmission line from the Chayandinskoye field in Russia (with possible connection to it and the Kovyktinskoye field) to the northeast of China.

According to Liao Yongjian, Vice President of CNPC's state-owned oil and gas company, ten regional power plants are planned to be built in 2011-2015.-

zervoirs with a capacity of 22.4 billion ^m3, which will increase the capacity of the national gas storage system from the current 3% of consumption to 8-10% [2].

All this shows that the Chinese government has now made a bet on a sharp increase in the use of gas in the national economy.

DYNAMICS OF CONSUMPTION GROWTH

The picture of gas consumption growth in China is quite dynamic. According to the latest data from BP Statistical Review for 2013, the share of gas in the energy balance of the PRC for the period 2000-2012 increased from 2.4% to 5%, while the share of oil and coal decreased [3]. It is also expected that the share of gas in the country's energy balance will continue to grow to 8.3% in 2015 [4].

China's average annual gas consumption growth since 2000 has been measured in double digits. According to the State Development and Reform Commission of China, gas consumption in the country in January-June 2013 increased to 81.5 billion ^m3 (an increase of 13.1%). China's own production was about 59 billion ^m3, while gas imports increased to 24.7 billion ^m3 (by 24.6%). That is, if in 2012 gas consumption amounted to 150 billion ^m3, then in 2013, according to preliminary data, it reached at least 160 billion ^m3. At the same time, in-house production in 2013 amounted to approximately 110 billion ^m3. In other words, about 50 billion m3. ^m3 of gas demand was covered by its imports (an increase of 25%), in particular, Turkmen pipeline gas and LNG from the world market [5].

After the signing of the General Agreement on the construction of the Turkmenistan-China gas pipeline and the supply of natural gas to China in 2006, Turkmenistan became the main importer of gas to Beijing. A powerful gas pipeline was built and put into operation, and the necessary production and transport infrastructure was created.

According to BP Statistical Review, China imported 21.3 billion ^m3 from there in 2012.

In September 2013, during the Turkmen-Chinese high-level talks, an agreement was reached on the fourth direction (direction D) of the Turkmenistan-China gas pipeline. The new gas artery will be laid along the route Turkmenistan-Uzbekistan-Tajikistan-Kyrgyzstan-China. Additional volumes of natural gas will be delivered from Turkmenistan to China via this route.

According to the same BP Statistical Review, Turkmen gas supplies are expected to reach $ 65 billion by 2015. ^m3 per year. In addition, China may soon start receiving gas from Uzbekistan, and later also from Kazakhstan. More recently, a newly constructed gas pipeline has started to supply China with gas from Myanmar.

In the coming years, the difference between the production of its own gas and the volume of its consumption in China will reach 100 billion rubles. ^m3 with the prospect of a further increase in the deficit. At the same time, prices for gas purchases abroad are also rising.

Thus, according to the General Administration of Customs of the People's Republic of China, the cost of gas imported via pipelines in June 2013 it was $347 per 1000 ^m3. Thus, the Chinese now pay almost as much for Turkmen gas as the Europeans do for Russian gas [6].

Prices for LNG imported by China are also constantly rising. Now they have already exceeded the target of $406/1000 ^m3 [7]. Therefore, the question of how much it will cost China to import LNG is becoming particularly acute. Moreover, a number of issues related to the pricing of imported pipeline gas have not yet been resolved satisfactorily for China. Thus, CNPC is currently suffering certain losses due to the constant increase in prices for imported Turkmen gas, and the company is looking for ways to offset these losses.

The same reasons have slowed down, until recently, the negotiations on Russian gas supplies. The parties reached a compromise not only on the price of Russian gas sold to China, but also on the rate and amount of credit required by the Russian side for the construction of the gas transmission line, as well as for the construction of the necessary gas chemical production facilities along the pipeline route.

WHAT INVESTMENTS WILL BE REQUIRED FROM RUSSIA?

As for Russia, the price differences were an important but not the only reason why Moscow was slow to agree to Beijing's proposed terms.

The Chayandinskoye field, whose gas is supposed to be supplied to China, is the largest oil and gas condensate field. Gas reserves amount to 1.2 trillion ^m3, which is almost twice as much as was produced in Russia in 2011. To export the gas produced at the Chayandinskoye field, it is necessary to build a main gas pipeline from Yakutia through Khabarovsk to Vladivostok with a branch to China.

The gas pipeline route will run along the route of the existing East Siberia-Pacific Ocean trunk oil pipeline, which will optimize infrastructure and energy supply costs. The pipeline's capacity will be 61 billion cubic meters. ^m3 of gas per year, commissioning along the entire length is planned at the end of 2017. According to preliminary estimates, the estimated investment in the development of the Chayandinskoye field and the construction of the gas pipeline will amount to 430 and 770 billion rubles, respectively.

But the point is not only that the development of this field will require huge costs. The gas of Eastern Siberia is, as geologists say, "fat, multicomponent", which, in addition to methane, has a high content of higher hydrocarbons and helium. This means that in parallel with gas production, it is necessary to develop gas chemistry, and appropriate investments are also needed from specialized companies.

Finally, there was another factor that until recently caused Gazprom to adhere to a wait-and-see strategy and not rush to build a pipe to China. The fact is that in the coming years, Russian gas will not be needed on the Chinese market.

A significant increase in the demand of the Chinese economy for gas will occur only in the medium term. In addition, the volume of gas consumption will largely depend on its final prices, as well as on the implementation of a phased reform to raise domestic gas prices in China to the world level.

The November 2013 plenum of the CPC Central Committee adopted a landmark decision stating that the party intends to move towards " strengthening the role of the market in determining the price of resources." This confirms the continuation of the policy of deregulating the economy*, reducing administrative barriers and sharply reducing the sector of domestic prices regulated by the state, primarily for energy resources [8].

This decision was a reaction to the statement of three major oil and gas companies in China (PetroChina, Sinopec and China National Offshore) about the need to raise gas prices due to the rapid growth of gas consumption, the high cost of exploration, production and transportation, as well as due to certain pressure on Chinese companies from foreign shareholders.

In addition, two Chinese provinces (Guangdong and Guangxi Zhuang Autonomous Region) have launched a pilot project to liberalize gas prices. The price set for the two provinces is determined using a formula linked to the prices of oil and hydrocarbon gases. Consumers in the cities of Guangdong province will pay no more than $433 for 1000 ^m3 of gas, and in Guangxi-no more than $406 [9]. This, of course, makes the Chinese market more attractive (including for Russia), and Beijing's position is more flexible and inclined to constructive cooperation.

According to sources close to the signing of the contract between Gazprom and CNPC, the price of gas is in the range of $350 - 380 per 1000 ^m3 on the Russian-Chinese border. The price formula will be based on the Asian basket of petroleum products, possibly on the price of oil in Singapore [10].

China is currently implementing a strategy to create excess capacity for export pipelines and LNG terminals, and therefore China has contracted more gas than it needs. In this situation, there are no special needs for Russian gas at the moment. But China has a huge potential for consumption growth, and sooner or later our gas will be in demand.

It should also be noted that the short-term gas shortage is unevenly distributed across China's regions. At the same time, significant volumes of gas will be required for the northeast of China and the announced program to modernize its old industrial base. And here, obviously, domestic gas reserves will not be enough, so the demand for Russian gas is quite high.

That is why both sides are focused on the practical implementation of previously reached agreements on gas supply volumes, supply routes, and sales prices.

China is also interested in modern technologies for gas production, processing and transportation, which are owned by a number of foreign gas companies, including Gazprom. This is due to the progressive depletion of easily recoverable gas resources in China, which requires increased capital investment to move to more complex and expensive extraction technologies. Therefore, China initiated the preparation of a number of documents on the main directions of Russian-Chinese cooperation in the gas sector.

These agreements provide not only for the supply of Russian gas to China, but also for the joint development of oil and gas fields in China, the creation of gas transmission and distribution systems there, the construction and operation of underground gas storage facilities, as well as cooperation in the field of geological exploration, production, transportation and sale of gas. An agreement was reached on the coordination of actions in the markets of third countries, on the formation of joint ventures for the implementation of specific projects and on the development of documents on strategic cooperation in the gas sector. This can be considered a continuation of the large-scale strategic partnership between the leading oil and gas corporations of Russia and China.

In addition, in the foreseeable future, Gazprom plans not only to take a stable position in the markets of China and the Republic of Korea, supplying gas not only to the borders of these countries, but also to participate in the entire chain of its consumption. In this case, in the future, the Transcontinental gas transmission system between China and Russia may become an operating system.-

* Deregulation - reduction of state regulation of the financial and credit system in order to stimulate the market economic mechanism (approx. ed.).

a new future Asian gas transmission system.

Under these conditions, the sale of gas from the fields of Eastern Siberia and the Far East in China at a relatively preferential price, which China insists on, is realistic, but only if Russian companies are admitted to the distribution assets of Chinese gas companies. Access of Russian gas suppliers to end consumers in China is an additional condition that improves the efficiency of gas supply in this direction.

This option of cooperation between our countries can be implemented both through a joint Russian-Chinese enterprise and through Gazprom's purchase of the assets of gas distribution network companies, subject to their privatization. The final decision in choosing one or another option of Gazprom's access remains with China.

As for Gazprom, it would prefer to implement in the Chinese direction the same strategy of access to the final consumer that it applies in Europe. This strategy consists, for example, of creating a joint gas company in Germany with the world's largest chemical concern BASF. Similarly, the agreement with the Italian oil and gas company EM provides direct access to the retail gas market in Italy.

Taking into account the fact that final gas prices for consumers are often more than 2 times higher than the prices of gas sales by Gazprom to gas transmission companies in individual countries, this dramatically increases the efficiency of the company that controls gas from the producer to the retail consumer.

Without the implementation of this condition, the significant investments that will be required to create a large-scale project for a new gas transportation corridor from Russia to China will not pay off soon.

There are certain prospects for the participation of Chinese companies in the development of deposits in Eastern Siberia. These companies can participate in the development of mineral resources not only as minority shareholders*. This is evidenced by successful examples of Gazprom's cooperation with large multinational corporations, for example, with Gazprom's German ally, one of the three leading gas companies in Europe, E. ON AG, on the basis of asset exchange and creating a chain from production to the end user. Strategic projects of these companies may involve joint participation in the fields of gas production, transportation and marketing, as well as in the electric power industry.

It is very important that the development of Russia's gas trade with China allows our country to move from the level of a regional gas supplier (as in Europe) to the global global market. This will allow Russia to have a significant impact on the global energy market.

* * *

China is currently implementing very capital-intensive projects in the gas industry. These include, first, massive investment in geological exploration, field development, and large-scale construction of main gas pipelines; second, development of regasification infrastructure** and the supply of liquefied natural gas in such areas as energy, chemistry, and metallurgy in the southern, eastern, and northeastern provinces of China; and third, increased Chinese participation in the exploration and development of gas resources around the world (in Central Asia, Africa, Latin America and the Middle East) and their transportation to the PRC.

All these steps lead to a steady increase in the cost of delivering gas to Chinese consumers and a corresponding increase in final gas sales prices. The Chinese government has already decided to gradually raise domestic gas prices to global levels. In parallel, solutions should be implemented to dramatically reduce the energy intensity of the national economy and reduce the environmental burden of enterprises. In addition, gas pricing methodologies are being improved, as well as mechanisms for granting preferences to oil and gas companies to encourage effective development of national gas resources. All this shows that the gas industry is being promoted as one of the strategic priorities of China's energy policy at the current stage of development.

* Minority shareholder (minority shareholder) - a shareholder of the company (individual or legal entity), the size of the block of shares of which does not allow him to directly participate in the management of the company (editor's note).

** Regasification of liquefied natural gas (LNG) - the process of converting LPG from a liquid state to a gas state, after which it becomes suitable for normal use - supply through pipelines to consumers and injection into gas cylinders (editor's note).

1. http://www.oilru.com/news/377875

2. http://www.vremya.ru/print/248476.html

3. http://www.bp.com/en/global/corporate/about-bp/energy-economics/statistical-review-of-worl d-energy-2013.html

4. http://ieport.ru/portal/news/24282 - 12-yenergeticheskaya-pyatiletka-kitaya.html

5. http://www.kommersant.ru/doc/2239770

6. http://www.gazprom.ru/press/reports/2013/china-suffocates/?from=rss

7. http/www.nvpress.ru/economy/1063

8. http://www.finam.ru/analysis/newsitem690A6/default.asp

9. http://www.vedomosti.ru/companies/news/21050951/ft-cena-gaza-gazproma-na-granice-s-kit aem-mozhet-sostavit#ixzz2pdaZzg1z

10. http://www.vedomosti.ru/companies/news/20361851/rossiya-nashla-kitayu-gaz#ixzz2nnxNSx 7a

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