GlobalData’s latest analysis of Russia’s natural gas production predicts that over $55.7bn in capital expenditure (capex) will be spent by Russia-focused operators on gas projects over the next four years to ensure the country’s production remains around 61 billion cubic feet per day (bcfd) in 2021.
Gazprom looks set to continue to drive Russia’s gas production, with a 60.1% share of all production in 2021. Rosneft Oil Company and Novatek follow with 12.9% and 11.6%, respectively. Russia has 21 key planned and announced gas projects, of which 13 will be producing by 2021. Gazprom would lead in greenfield gas projects, with participation in nine planned and announced projects in the near future, followed by Novatek and Rosneft Oil Company, with seven and four projects, respectively.
Top planned and announced gas projects in Russia
Source: Upstream Analytics, GlobalData
Russia is expected to spend $55.7bn as capex on conventional gas projects from 2018 to 2021, with spending topping in 2021 at $15.1bn. Average full cycle capex per barrel of oil equivalent for Russian gas projects is $3.90. Onshore projects have an average full cycle capex of $3.40 per barrel of oil equivalent, while shallow water projects average $11.90 per barrel of oil equivalent in full cycle capex. New gas projects average $5.90 per barrel of oil equivalent in capex.
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Average development break-even price for gas projects in Russia is about $1.30 per thousand cubic feet (mcf). Shallow water projects require a gas price of $5.80 per mcf to break even, while onshore projects have a development break-even price of $1.10 per mcf.