RUSSIAN GAS CONSUMPTION: NEAR- AND LONG-TERM OUTLOOKS
The question dominating the Russian energy sector today is how Russia will meet its rising domestic demand for gas as well as its export obligations. Amid uncertainties surrounding the next generation of Russian gas supply, a spike in gas consumption in 2006 and the promulgation of bullish outlooks for domestic gas demand raised widespread fears of an impending ""gas crisis"" in Russia.
CERA's analysis indicates that a moderate rate of growth in Russian gas demand is the most likely scenario to 2030. The rationale behind this forecast is threefold:
*Gross domestic product growth is expected to slow from 6-7 percent in recent years to 3-4 percent longer term.
*Structural shifts are expected to occur in the Russian economy, and in the power sector in particular, toward greater efficiency and conservation.
*Efficiency and conservation improvements are also expected to be driven by higher domestic gas prices.
