FSUOGM: energy transition takes centre stage at SPIEF

The energy transition took centre stage at the St Petersburg International Economic Forum on June 3-5, with the event resulting in a raft of deals between Russian and international companies aimed at tackling emissions.

Russia has promoted SPIEF as the “largest post-pandemic meeting,” estimating ahead of the event that 5,000 delegates would attend. Russia is largely perceived as a laggard in addressing its impact on the climate, and for good reason. Unlike most other countries, it is yet to adopt a strategy for reaching net-zero emissions by 2050, and its current policies do not envisage any significant changes to its energy mix over the coming decades. Oil, gas and coal accounted for nearly 90% of the country’s primary energy demand in 2019, according to the International Energy Agency (IEA).

Nevertheless, Russian oil and gas companies are beholden to international investors and customers, who are eager to see them do more to address their climate footprint. In recent years, these companies have made meaningful progress in reducing their emissions, and they have set even more ambitious goals for the future.

In other news, Uzbekistan has reached out to Russian financiers to help realise petrochemical and fertiliser projects. Jizzakh Petroleum, a joint venture between Uzbekistan’s national oil and gas company Uzbekneftegaz and Russian counterpart Gazprom, signed a memorandum of understanding (MoU) with Russian state lenders Gazprombank, VEB.RF and the Russian Agency for Export Credit and Insurance for a methanol-to-olefins (MTO) plant in the central Bukhara region. The deal envisages up to $800mn of financing and insurance coverage.

Other MoUs were reached in St Petersburg between Cyprus-registered Ferkensco Management and Gazprombank, on financing for an ammonia plant and a complex mineral fertilisers plant.

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