Russian Energy Deals with Asia Mark Shift Away from Europe

Russian Energy Deals with Asia Mark Shift Away from Europe

MOSCOW - A string of new Russian deals with Asian customers marks the beginning of a major shift away from the country's traditional markets in Europe, where it is facing competition and regulatory pressure, said one of Russia's top energy officials.

The world's largest energy producer has for years threatened to switch its exports eastward, but Deputy Prime Minister Arkady Dvorkovich said in an interview with The Wall Street Journal that Russia has finally made a breakthrough in its efforts to tap the lucrative Asian market.

Russia has for decades been Europe's biggest energy supplier, but has faced criticism for its hardball tactics, including a European Union investigation launched last autumn into whether its state gas firm abused its dominance in Central and Eastern Europe. Now, dwindling gas demand and regulatory pressure in Europe have dictated a change in strategy, said Mr. Dvorkovich, who oversees the government's energy policy.

Exports from Russian state gas giant OAO Gazprom's to the EU slid last year as power producers favored cheap coal imports from the U.S. by booming gas production. Lower gas sales are hurting Russia's economy as they account for over 10% of export revenues.

"If Europe prefers energy sources that are not environmentally clean, that's a decision for Europe," Mr. Dvorkovich said. "It's okay. Demand exists in other regions of the world."

Mr. Dvorkovich said Russia would continue to be "safe and stable partners" to Europe and "deliver as much gas as it needs," but saw greater prospects for boosting sales in Asia.

President Vladimir Putin said Friday that Russia would for the first time allow companies other than Gazprom to export liquefied natural gas, a form of the fuel that can be shipped to more distant markets than pipeline gas.


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Copyright (c) 2012 Dow Jones & Company, Inc.


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