Natural Gas Projects in the Russian Arctic: The Interplay of Environmental, Commercial, and Geopolitical Factors

Lead Author Jack, Sharples
Institution Contact European University at St Petersburg
Theme Theme 2: Vulnerability of Arctic Societies
Session Name 2.5 Geopolitics and Security of the Arctic
Datetime Fri, Sep 16, 2016 10:45 AM - 10:50 AM
Presentation Type Oral
Abstract text This presentation will compare two Russian Arctic gas production and export projects – Shtokman and Yamal LNG – as assess them in terms of the environmental, commercial and geopolitical challenges, in order to assess the reasons for the (probable) success and failure. In particular, this presentation will argue that the Shtokman project failed due to a combination of the environmental difficulties (and expense) of offshore Arctic natural gas production and the loss of its intended export market (the US), when a combination of commercial and geopolitical factors led the US to self-sufficiency in natural gas. Conversely, the Yamal LNG project will likely succeed due to less environmentally challenging (and therefore cheaper) nature of onshore gas production, coupled with Chinese investment and China’s geopolitical desire for a diverse natural gas import portfolio, despite the financial challenges posed by international sanctions. In short, while both projects face different (yet significant) environmental challenges due to their Arctic locations, the different strategies pursued by the United States and China in order to ensure their own energy security had a significant impact on the successes and failures of these two projects. This comparison illustrates the extent to which the development of hydrocarbon production and export projects in the Russian Arctic depend upon a combination of environmental, commercial, and geopolitical factors.
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