Russian gas runs low

Manufacturing News, Source : The Manufacturer US
Published : 27 Nov 2006 14:16

Gazprom, Russia's state-owned natural gas producer, is proving far less rich in resources than it has claimed.

This is significant as Russia has used Gazprom as a political arm, to punish the US and reward neighbors based on policy.

As The Economist reports, Russia expects to run short of 4.2 billion cubic metres (bcm) of gas in 2007, which is enough to fuel a couple of small countries, and likely short 126 bcm a year by 2010.

Not since the Soviet Union has Russia developed a big new gas field. The old pipelines and equipment waste an estimated 42 bcm per year, and Russia has upped its internal demand by promoting gas heat in private homes.

In September, Gazprom rejected the bids of five western oil companies, including Chevron and Konoko, to develop its Shtokman natural gas field, pledging to develope the field on its own (no announcements yet).

In late September, Gazprom also announced it would direct LNG slated for the US to neighboring Europe instead. This was retaliation against the US for, among other political slights, US's refusal to support Russia's entry into the World Trade Organization.

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