Russia's gas "Triopoly": implications of a changing gas sector structure

The growth strategies of the two largest so-called independent Russian gas producers - Novatek and Rosneft - as well as developments in international markets and changing domestic energy needs have put pressure on the present Russian gas sector model dominated by Gazprom. The three companies are involved in a struggle over export liberalization as well as the conditions in the domestic market. Liquefied natural gas is top priority for Novatek and Rosneft's main gas focus is on eastern Russia and Asia, but there is still room for considerable tension with Gazprom. The government wants to both improve Russia's position in export markets and maintain stable domestic supplies, including to socially disadvantaged regions and institutions. Gazprom is insisting that if further access to export markets is granted to the Independents, then they must take greater responsibility for domestic market obligations. On the other hand, the key Independents seem intent on stopping or slowing down their expansion in the domestic market in order to prioritize export sales, and will certainly not take broader domestic supply responsibilities without better access to export markets. The balancing of policies involves strong players on the Russian economic and political scene, all with ties to the Kremlin.