Session A:Politics and Economics of Gas Export Projects
Russian Gas:Across Belarus to Poland & Germany
David G. Victor and Nadejda M. VictorStanford University
(http://pesd.stanford.edu/gas)
Project ConferenceHouston
26 May 2004
The Belarus Connector
Kiev
MinskWarsawPrague
Berlin
Istanbul
Moscow
A
F
Yamal
Urengoy
Yamburg
Orenburg
C
B
Turkey
Uzbekistan
Turkmenistan
Kazakhstan
Russia
DE
Caspian Sea
Black Sea
MediterraneanSea
Dauletabad
G
H
20°E10°E0°E10°W
30°E
30°E
40°E
40°E
50°E
50°E
60°E
60°E
70°E
70°E 80°E
80°E
90°E
30°N
40°N
40°N
50°N
50°N
60°N
70°N
0°E
10°W
90°E
30°N
]0 1,000 2,000500 KilometersGas Fields
The Key Players and Their Interests
• Russia and Gazprom– Boost export volumes– Direct access to German Market
• Bypass Ruhrgas; gain higher margins– Internal turmoil in early 1990s
• Belarus• Poland• Germany
– No “German” interest– Wintershall (BASF): break the German gas monopoly
How well did they do?
Soviet and Russian Gas ExportsFSU: Natural Gas Production, Export, Import and Consumption
-200
-100
0
100
200
300
400
500
600
700
800
1955 1960 1965 1970 1975 1980 1985 1991 2001
Bill
ion
Cub
ic M
eter
s
Import
Export
Productionfor internaluse
187
129.3
10.4
544
666
553
Gas Consumption
371
270
47
FSU: Natural Gas Export
0
20
40
60
80
100
120
140
1960 1980 2000
Bill
ion
Cub
ic M
eter
s
Gazprom and the German Market
• Minimal Impact on margins• Volumes higher, but along baseline• Accelerated gas-on-gas competition and
opening of German gas market• All told, a disaster for Gazprom?• Story still unfolding
– Gazprom’s downstream holdings
German Market and Wintershall
• Eroded Ruhrgas margins• Wintershall has ~15% share today, up
from ~zero in 1990• German (large) consumer a winner
Transit countries
• Poland– The problem of demand
• Belarus and Ukraine– Reversal of roles
0
50
100
150
200
250
300
350
1965 1970 1975 1980 1985 1990 1995 2000
Bcm
Gas
Equ
iv
Coal
Oil
Gas
Hydro
Share of Final Consumption
0%
20%
40%
60%
80%
100%
1965 1975 1985 1995
Coal
OilGas Hydro
Poland: Gas Struggles for Share
Contrast: Soviet State Orders GasFSU: Primary Energy Production, 1913-2002
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1913
1917
1921
1925
1929
1933
1937
1941
1945
1949
1953
1957
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
Mto
e
0%
20%
40%
60%
80%
100%19
22
1932
1942
1952
1962
1972
1982
1992
2002
Gas
Oil
Coal
Biomass
Hydro
Nuclear
biomass
coal oil
gas
Direct Exports and Bypass
Kiev
MinskWarsawPrague
Berlin
Istanbul
Moscow
A
F
Yamal
Urengoy
Yamburg
Orenburg
C
B
Turkey
Uzbekistan
Turkmenistan
Kazakhstan
Russia
DE
Caspian Sea
Black Sea
MediterraneanSea
Dauletabad
G
H
20°E10°E0°E10°W
30°E
30°E
40°E
40°E
50°E
50°E
60°E
60°E
70°E
70°E 80°E
80°E
90°E
30°N
40°N
40°N
50°N
50°N
60°N
70°N
0°E
10°W
90°E
30°N
]0 1,000 2,000500 KilometersGas Fields
Implications for Geopolitics
• Primary of Geoeconomics– Estimation of deman
• Poland; Turkey
• Transit Country Problem– Ephemeral and overstated?– Contestability of routes and markets
• Security of Supply: Russia the reliable supplier?
Backup Slides follow
1970, 3.4 Billion Cubic Meters
1975, 19.3 Billion Cubic Meters
1980, 57.6 Billion Cubic Meters
1991, 105.2 Billion Cubic Meters
2001, 131.06 Billion Cubic Meters
Czech Republic
Austria
Bulgaria
Croatia
Finland
France
Germany
Greece
Hungary
Iran
Italy
Netherlands
Others
Poland
Romania
Slovakia
Czechoslovakia
Poland
Austria
Germany
Poland
Italy
Germany
Poland
Czechoslovakia
Italy
Germany
Poland
Czechoslovakia Italy
France
Germany
Poland
Italy
France
Austria
Turkey
Turkey