On October 27, at the plenary session of the 8th Summit of Heads of State and Government of the Gas Exporting Countries Forum (GECF) in Moscow, Russian President Vladimir Putin delivered an address to natural gas exporting countries, urging them to strengthen cooperation to maintain stability in the global market. The speech took place at the World Trade Center in Moscow and was dedicated, according to the Russian leader, to the 'most pressing problem' of the industry — supply disruptions.
Global Market Assessments and Sources of Imbalance
In his speech, Putin stated that natural gas accounts for approximately a quarter of all global energy consumption, and global demand, according to his forecasts, will reach 5.5 trillion cubic meters per year by the middle of the century. He linked the growing risk of a protracted market imbalance to several factors: tensions in the Middle East — a key global gas production center, disruptions in pipelines, and restrictions that, according to him, some countries have introduced on the procurement of gas equipment and technologies. 'Over a relatively short period of time, a large volume of gas has been withdrawn from the market, while demand remains unchanged,' the Russian leader stated.
LNG as a Tool of Flexibility and Route Optimization
To mitigate the problems, Putin proposed optimizing transport routes taking into account the geographical location of the forum member countries and utilizing swap agreements between the parties. According to him, this is becoming more feasible due to the growing flexibility of the market driven by the widespread use of liquefied natural gas: LNG supplies are not tied to international pipelines, and LNG, according to the Russian president, accounts for about half of the global gas trade volume.
Russia's Role and Warning About Consequences
A separate block of the speech was devoted to Russia's position in the global market. Putin stated that Russia possesses the world's largest natural gas reserves and ranks second in production volume, and has also created, in his words, 'a unique industrial complex' that allows for diversifying supply sources and developing gas processing and conversion. He warned that any attempts to exclude Russia from the global gas market or hinder the development of its gas industry would, in his estimation, have serious consequences and lead to increased costs for consumers in other countries. As an example, the Russian leader cited Europe, stating that, in his view, the rejection of energy supplies from Russia and the termination of long-term contracts are harming the region's industry and social sector.
About the Gas Exporting Countries Forum
According to Putin, GECF member countries currently own approximately 70% of the world's natural gas reserves, and account for about 40% of global gas exports; therefore, he argued, global producers must ensure stable and reliable supplies. The Gas Exporting Countries Forum itself was established in 2001 and officially obtained organization status in December 2008; its stated goals are to strengthen cooperation and dialogue between gas producing and exporting countries, as well as to ensure stability and security in the global gas market.
