The global implications of a Russian gas pivot to Asia

Abstract

Recent years have seen unprecedented shifts in global natural gas trade, precipitated in large part by Russia's war on Ukraine. How this regional conflict impacts the future of natural gas markets is subject to three interconnected factors: (i) Russia's strategy to regain markets for its gas exports; (ii) Europe's push towards increased liquified natural gas (LNG) and the pace of its low carbon transition; and (iii) China's gas demand and how it balances its climate and energy security objectives. A scenario modelling approach is applied to explore the potential implications of this geopolitical crisis. We find that Russia struggles to regain pre-crisis gas export levels, with the degrees of its success contingent on China's strategy. Compared to 2020, Russia's gas exports are down by 31-47% in 2040 where new markets are limited and by 13-38% under a pivot to Asia strategy. We demonstrate how integrating energy geopolitics and modelling enhances our understanding of energy futures.

Fig. 1. European pipeline imports from Russia (mmcm/d) and Dutch TTF Front-Month Gas Price (EUR/MWh).

Data from ENTSOG Transparency Platform and Argus Direct. This definition of Europe excludes Turkey.

Fig. 2. Eurasian natural gas pipeline network.

This map shows the main pipeline routes and current capacities in the Eurasian region, covering Europe, Russia, China and Central Asia. The map was constructed using pipeline information exclusively from GEM Wiki, with the base map sourced from freeworldmaps.net, at https://www.freeworldmaps.net/powerpoint/.

Fig. 3. Global CO₂ emissions and gas production under NDC and B2D scenarios.

a CO₂ emissions under NDC and B2D climate policy ambition levels and (b) corresponding modelled gas production trajectories. We note that at the global level, emissions and gas production pathways are highly comparable between LM and P2A and are therefore not differentiated. For gas export levels by pipeline and LNG, see SI Fig. 3.

Fig. 4. Russian gas exports and European gas imports by scenario, 2020–2050.

a provides information on Russian pipeline exports by destination plus LNG exports. b shows the relative percentage change in total Russian export levels relative to 2020. c provides information on European pipeline imports by region of origin plus imports via LNG routes. The first part of the scenario label denotes the climate policy ambition, NDC or B2D. The second part of the label denotes the geopolitical scenario, LM or P2A. The counterfactual for both LM and P2A only has the climate policy ambition level in its label. Note that European refers to continental Europe, so excludes the UK. Data for (a) and (b) can be found in SI Table 4, and for (c) in SI Table 5, and in the file supplementary data 1.

Fig. 5. European gas supply, 2020–2050.

This figure shows the origin of gas supply to Europe, with ‘production’ produced domestically, and imports via ‘pipeline’ and ‘LNG’. The first part of the scenario label denotes the climate policy ambition, NDC or B2D. The second part of the label denotes the geopolitical scenario, LM or P2A. The counterfactual for both LM and P2A only has the climate policy ambition level in its label. Note that European refers to continental Europe, so excludes the UK. Data for this figure can be found in the file supplementary data 1.

Fig. 6. Chinese gas imports and total gas supply, 2020–2050.

a provides information on Chinese imports by origin plus total LNG imports. b shows the origin of gas supply to China, with ‘production’ produced domestically, and imports via ‘pipeline’ and ‘LNG’. The first part of the scenario label denotes the climate policy ambition, NDC or B2D. The second part of the label denotes the geopolitical scenario, LM or P2A. The counterfactual for both LM and P2A only has the climate policy ambition level in its label. Further data on China’s gas balance can be found in SI Table 6, and in the file supplementary data 1.

Fig. 7. Scenario matrix of geopolitical and climate ambition dimensions.

The horizontal axis shows the geopolitical dimensions while the vertical axis shows the level of climate ambition, used to derive a spread of gas demands. Four core scenarios are derived based on the combination of geopolitical and climate dimensions, with two additional scenario (REF) constructed to provide case without geopolitical factors recognised.