Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to Forbes on the current situation with Russian pipeline gas supplies to Europe in terms of the refusal of a number of EU countries to switch to gas payments in rubles.
Decrease in production and growth of domestic consumption
“In general, by the end of 2022, Gazprom’s supplies to the EU countries could potentially drop to 100-105 billion cubic meters. Thus, the reduction can be approximately 35-40 billion cubic meters compared to 2021, Gromov says. - This is the real decline that Europe will face in terms of Russian gas supplies.”
The volumes that Gazprom fails to supply to the external market will be partially offset by consumption in the domestic market with some reduction in production, Gromov notes.
The expert recalls that last year gas consumption in Russia rose to a record high of almost 50 billion cubic meters. He also notes that, unlike oil production, where stopped wells are permanently decommissioned, there are no such problems with gas wells and production can be temporarily stopped.
“Unlike oil, there are currently no serious opportunities for Gazprom to redirect pipeline gas supplies to other markets,” he notes. “Therefore, efforts will be made to increase gas sales within the country.”
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