GlobalData’s latest analysis of Russia’s natural gas production on January 8, 2018, predicts that over $55.7 bln in capital expenditure (capex) will be spent by Russia-focused operators on gas projects over the next 4 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 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 9 planned and announced projects in the near future, followed by Novatek and Rosneft, with 7 and 4 projects, respectively.
Russia is expected to spend $55.7 bln as capex on conventional gas projects from 2018 to 2021, with spending topping in 2021 at $15.1 bln.
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.
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.