Russia’s Gazprom’s gas exports to Europe could fall by about a third this year due to the crisis in Ukraine, competition with liquefied natural gas and plans to switch to payments in rubles, Reuters quoted analysts as saying.
Russia accounts for about 40 percent of Europe’s gas supply, but the West has been trying to break away from Russian energy flows since Russia launched what it calls a “special military operation” in Ukraine on February 24.
Plans to pay “unfriendly” countries for gas sales in rubles have also undermined prospects for Russian gas exports, analysts said, as Europe called it “blackmail” and almost unanimously refused to comply. .
Sergei Kapitonov of the Energy Center of the Skolkovo School of Management in Moscow said that Gazprom’s supplies to Europe could be reduced by 40-45 billion cubic meters this year from about 150 billion in 2021.
Sindre Knutsson, head of gas market research at Rystad Energy, said the pipeline volumes could be further reduced, “due to pressure from buyers to be less dependent on Russia or due to the containment of quantities by Russia, for example.” due to a dispute over the currency in which the gas should be paid “.
He also did not rule out a halt to flows through Ukraine if the conflict prevents the pipeline from continuing to operate safely.
Gazprom has not announced its expectations for gas exports to Europe, while the company did not respond to a request for comment.
Gazprom’s top gas consumers in Europe in 2021 were Germany, which received 45.8 billion cubic meters, Italy, which received 20.8 billion cubic meters, and Austria, which received 13.2 billion cubic meters.
Russia is Germany’s top supplier, supplying just under a third of its natural gas, while Italy receives about 40% of its imported gas and Austria 80% of its natural gas from Russia.
So far, only Hungary has agreed to switch to the ruble gas system, which includes foreign currency payments from buyers through Russia’s Gazprombank, which will then convert it into rubles.
Alexei Gromov of the FIEF Institute said Russian pipeline gas could be partially replaced by liquefied natural gas by sea from the United States and Russia’s Novatek, which does not have to charge customers in rubles.
Gromov said Russia’s gas exports from pipelines to the European Union could reach about 105 billion cubic meters this year.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
