07/11 Closing Prices / revised 07/12/2024 07:42 GMT |        07/11 OPEC Basket   $86.11   +$0.71 cents 07/11 Mexico Basket (MME) $76.61   +$0.44 cents   05/31 Venezuela Basket (Merey)  $70 45   -$4.36 cents| 07/11 NYMEX WTI  August CLQ24  $82.62 +$0.52 cents  | 07/11 ICE Brent Sept  BRNU24  $85.40 +$0.32 cents  | 07/11 NYMEX Gasoline Aug RBQ24  $2.52 +0.6 %  |  07/11 NYMEX  Heating Oil  Aug  RBQ 24    $2.52  -0.5% | 07/11 Natural Gas August NGQ 24   $2.27  -2.6%  | 07/05 Active U.S. Rig Count (Oil & Gas)    585  +4  | 07/12 USD/MXN Mexican Peso   17.7730 (data live)  | 07/12 EUR/USD  1.0869 (data live)  | 07/12 US/Bs. (Bolivar)   $36.53030000 (data BCV)

Russia’s Gas Exports Are Expected to Slide in 2023 – NYTimes

  • Once Europe’s mainstay source of natural gas, Russia’s pipeline exports this year are now likely to be half of last year’s total, analysts and the Russian media say.
A Gazprom gas-processing plant in the Orenburg region of Russia. Credit...Alexander Manzyuk/Reuters
A Gazprom gas-processing plant in the Orenburg region of Russia.( Alexander Manzyuk/Reuters )

Stanley Reed, NYTimes

LONDON
EnergiesNet.com 04 27 2023

Evidence is piling up about the steady disintegration of Russia’s vital natural gas export industry since the country’s invasion of Ukraine.

Russian news reports estimate that Russia’s gas exports by pipeline could fall as much as 50 percent in volume this year from last year. And last year was an especially bad year.

The problems are not limited to gas delivered by pipeline. The European Union is threatening to curtail imports of liquefied natural gas from Russia, which were the solitary bright spot for the Russian industry last year.

Russia has to a great extent cut itself off from Europe — its most important customer for natural gas, one that paid on time and full prices. By launching hostilities and then cutting and manipulating supplies, Russia threw away decades of work establishing itself as the largest gas supplier to energy-hungry Europe, ceding that position to Norway.

On Thursday, Izvestia, a Kremlin-linked publication, reported that pipeline exports might fall 50 percent in 2023, citing a government forecast. That figure roughly correlates with some Western estimates.

Russia has fared surprisingly well at holding on to its share in the oil markets despite Western embargoes, although the need to sell at a discount has cut deeply into revenue.

But finding new customers for gas is much more difficult because most of the fuel is still transported through fixed pipelines. Russia has less capacity than the United States, Qatar and Australia to export liquefied natural gas, a fuel that can be transported on ships like oil.

Russia’s losses have provided an easy victory for the petroleum industry in the United States, which has greatly increased shipments of liquefied natural gas to terminals across Europe.

Russian gas exports to the European Union by pipeline are likely to fall by two-thirds this year, according to estimates from Viktor Katona, an analyst at Kpler, a research firm. And exports in 2022, the first year of the invasion, fell more than 50 percent.

Russia is likely to see some gain in gas sales to China and, potentially, to Turkey — now Moscow’s largest customers for gas. Russia exports gas to China using a pipeline called Power of Siberia, and it is angling to build another link. But at this point, China is just a fraction of the market that Europe used to be for Russian gas.

Europe’s strategy for reducing dependence on Russian gas and other energy sources has worked surprisingly well. Europe made up the losses largely by increasing imports of liquefied natural gas, largely from the United States, and slashing demand. The European Union recently reported that gas consumption from August through March was nearly 18 percent below the average over those months from 2017 to 2022.

Europe has now survived what once threatened to be a difficult winter with little disruption, and that has soothed markets. European gas prices, which spiked in the early months of the war, have fallen almost 90 percent from their peak in August. Those price declines will translate into lower revenue on the gas Moscow does manage to sell.

Russian oil revenue is also under pressure, dropping 29 percent in the first quarter of 2023 from the last three months of 2022, to about $39 billion, as sanctions and price caps began to bite, according to a study published Wednesday by the Kyiv School of Economics.

With this success behind them, European leaders are contemplating widening their attack to include imports of liquefied natural gas from Russia.

Moscow substantially increased liquefied natural gas shipments to Europe last year, largely from an Arctic facility, while it slashed pipeline exports. Russian L.N.G. shipments to Europe reached record levels in February, according to Rystad Energy, a consulting firm.

But Kadri Simson, the E.U. energy commissioner, has urged members of the bloc and European energy companies to stop buying Russian L.N.G. and “not to sign any new contracts with Russia,” she told lawmakers last month.

Some analysts are skeptical that the European Union would prohibit Russian L.N.G. purchases, not least because big buyers of gas from the facility called Yamal LNG are TotalEnergies, one of France’s most important companies, and Naturgy, a major Spanish energy company.

“We think it would become a real headache for the E.U. to do that,” said James Waddell, head of European gas and global L.N.G. at Energy Aspects, a research firm.

On the other hand, having largely gone cold turkey on Russian pipeline gas, European leaders may calculate that “going without Russian L.N.G. would be less damaging,” figured Massimo Di Odoardo, vice president for gas at Wood Mackenzie, a consulting firm.

____________________________

Stanley Reed has been writing from London for The Times since 2012 on energy, the environment and the Middle East. Before that he was London bureau chief for BusinessWeek magazine. More about Stanley Reed

A version of this article appears on the NYTimes, in print on April 28, 2023, Section B, Page 7 of the New York edition with the headline: Russia’s Vital Gas Exports Could Fall by 50% in 2023. 

nytimes 04 27 2023

Share this news

Support EnergiesNet.com

By Elio Ohep · Launched in 1999 under Petroleumworld.com

Information & News on Latin America’s Energy, Oil, Gas, Renewables, Climate, Technology, Politics and Social issues

Contact : editor@petroleuworld.com


CopyRight©1999-2021, EnergiesNet.com™  / Elio Ohep – All rights reserved
 

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission fromPetroleumworld or the copyright owner of the material.

 
 
Scroll to Top