Russia wants to increase liquefied gas exports fivefold

Russia’s oil plans

The Kremlin’s baseline scenario envisions crude oil production of 540 million tonnes annually by the end of this decade and through the middle of the century.

Western analysts who reviewed the new energy strategy document released by the Russian government on Monday noted that this figure is equivalent to roughly 10.84 million barrels per day - only slightly above 2023 levels, which serve as the baseline.

It is also expected that Russian oil exports will remain stable.

This forecast reflects expectations of increased competition from other major fossil fuel producers and a decline in global demand after 2035, according to Bloomberg.

Additionally, the strategy highlights the gradual depletion of high-quality hydrocarbon reserves in Russia and the growing share of more expensive resources that are harder to extract.

Export stagnation could undermine market influence

Russia, which accounts for about 10% of global crude oil production, holds significant market influence. Moscow is a major supplier to India and China and a key member of OPEC+.

Western analysts note that stagnation in exports could weaken this influence, and any long-term slowdown would also deprive the Russian budget of crucial revenues, directly affecting the Kremlin's ability to meet its spending commitments.

Russia’s gas strategy

Unlike oil, Russia’s gas strategy envisions significant growth in annual production. Moscow plans to produce 853 billion cubic meters by the end of this decade, more than a third higher than in 2023.

It is also expected that by 2050, Russia’s production will exceed 1 trillion cubic meters. This is largely attributed to an increase in liquefied natural gas (LNG) volumes, according to Bloomberg.

Gas projections

Russia’s gas plans indicate that production, with a baseline of 637 billion cubic meters in 2023, is expected to rise to 853 billion cubic meters by 2030 and further increase to 1.107 trillion cubic meters by 2050.

As for LNG exports, Moscow aims to boost volumes from 45 billion cubic meters (the 2023 baseline) to 142 billion cubic meters by 2030 and to 241 billion cubic meters by 2050, more than a fivefold increase.

Russia plans to increase LNG production by launching four more plants this decade, in addition to those already operating on Sakhalin Island and the Yamal Peninsula.

Moreover, Russia intends to expand the Arctic LNG 2 project (an LNG plant being built on the Gydan Peninsula by the sanctioned Russian company Novatek), aiming for a total capacity of 105 million tons per year across all projects by 2030.

Impact of western sanctions on Russia's gas ambitions

Currently, Western sanctions stand in the way of Russia's ambitious plans. All four future projects are blacklisted by the US while Arctic LNG 2 has halted operations because restrictions prevent it from selling and delivering cargo.

Russia's target scenario for gas also includes nearly doubling pipeline gas exports to 197 billion cubic meters by 2036. However, even if this goal is met, the volumes will still not surpass the record set in 2018, before the full-scale invasion of Ukraine.

Previously, Russia was the world’s largest pipeline gas supplier, but the aggressor nation lost almost all of its European customers after the onset of the full-scale war.

Currently, there is only one pipeline route available to the European Union, and negotiations for a second channel, Power of Siberia, to China have stalled. As a result, the Russian monopoly Gazprom lacks the means to surpass its pre-war record.

In January, Western media reported that the EU was considering the gradual implementation of restrictions on imports of Russian LNG and aluminum.

Additionally, in March, DTEK CEO Maksym Timchenko stated that liquefied natural gas from the US would help strengthen the energy security of Ukraine and European countries.