Liberalization of Russian gas exports: benefits and challenges

Abstract

Russian gas export liberalization has been discussed throughout the post-Soviet period. Recently, the number of Gazprom's export monopoly advocates has been diminishing as a result of dramatic changes in both European and Russian gas markets, which are: increasing international trade in liquefied natural gas; the EU movement from longterm contracts to the commodity markets and hub pricing; substantially increased share of the non-Gazprom gas suppliers at the Russian domestic market. Although there is a potential risk of price decrease in the EU gas market in the case of the Gazprom export monopoly abolition, the benefits of the Russian gas export liberalization would be greater than losses. The gas resource base and the cost of pipeline gas production would allow Russia to improve its positions in the world market.

Defining trends in the evolution of the Russian gas market

“…Henderson (2011), C. Locatelli (2014, A. Yakunina (2017) and others are devoted to various aspects of the problems of further development of the domestic gas market of Russia in general and exchange mechanisms.…”

“…The current system of domestic gas trade is characterized by an insufficient level of competition, non-transparent financial flows and pricing principles, and the presence of closed cartel chains hinders the formation of civilized rules and institutions of gas trade. It is also worth emphasizing that the preservation of regulated domestic gas prices below world market prices for many decades is explained by the fact that domestic gas prices are responsible for ensuring social and economic stability (Yakunina, 2017).…”

Les voies de la réforme du secteur gazier russe : une lecture institutionnaliste

“…Gazprom y est fortement opposé, arguant du fait qu'il assume le financement des gazoducs transnationaux, la politique de gazéification de la Russie voulue pat l'Etat et certains objectifs sociaux et politiques de celui-ci notamment au travers de sa fonction de fournisseur en dernier ressort du marché intérieur. Des changements dans ces domaines seront donc sans doute nécessaires pour faire évoluer la position de la compagnie (Yakunina, 2017). A ce jour, l'Etat s'est également refusé à briser le monopole d'exportation par gazoduc, réaffirmant la politique d'une seule voie d'exportation vers l'Europe.…”