"The Nord Stream’s fate to be decided by political agreements"

The Monocle magazine (2025. No. 11. pp. 20-24) published an interview with Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, on the prospects for Russian gas supplies to Europe.

— Which of the three potentially involved parties — Germany/EU, Russia and the USA — could benefit from the restoration of the Baltic pipeline artery? And why?

— Germany is objectively interested in launching one of the Nord Stream branches and, although they do not recognize it, other countries of Northwestern Europe - France, the Netherlands, Belgium and even the United Kingdom, as this would help to relieve market tension and lower stock prices in this region.

But for the same reason, the United States is not at all interested in this, whose goal is to sell the EU as much of its LNG as possible, preferably at a higher price.

— If American private investors really buy the surviving SP-2 line and resolve all political and legal issues related to its launch with Germany, is it beneficial for Russia to give the valve of this pipe under the control of the United States or any other jurisdiction?

— It seems to me that in the current circumstances it is no longer so important. Russia earns money primarily from gas supplies, not from its transportation. But Gazprom, as the owner, may naturally have a different point of view. And Germany, if it agrees to restart Nord Streams, may not want to depend on the mediation of certain American investors.

— But the loss of the European market has given Gazprom an impulse to engage in deep processing and liquefaction of gas, to increase its operational efficiency. There are no visible signs yet that Gazprom has begun to address these challenges, but if everything returns to normal for our piped gas in Europe, all these incentives will disappear.

— Despite a noticeable increase in domestic gas demand, LNG production and pipeline exports to China and Central Asia, Russia missed 78 billion cubic meters of production in 2024 compared to 2021. In general, if it were not for the failure of supplies to Europe, gas production in Russia in 2024 would probably be 15 percent higher than in reality. No gas chemistry can replace such volumes. LNG exports could have done this, although not quickly, but their development in 2024 was sharply slowed down under heavy and increasing sanctions pressure.

Deep processing of gas depends on the search for sales markets, including the limited domestic market, and price competition with imports, in particular Chinese, if we are talking about final polymer products. In terms of increasing the production and export of ammonia, methanol, carbamide, and others, the process is underway, but it is determined by the dynamics of these markets, and not by how much gas Russia supplies to Europe as an energy resource. There is no direct substitution and there will be no direct one.

Download the interview (PDF version)