Gas exports to the EU may be reduced by a third in 2022

Plans to charge “unfriendly” countries for gas sales in rubles have also undermined prospects for Russian gas exports, analysts say, as Europe said it amounted to “blackmail” and almost unanimously refused to comply.

Sergei Kapitonov of the Energy Center at the Moscow School of Management Skolkovo said that Gazprom’s supplies to Europe could be cut by 40-45 billion cubic meters this year from about 150 billion cubic meters in 2021.

Sindre Knutsson, head of gas market research at Rystad Energy, said the pipeline’s volumes could fall even further, “influenced by buyers’ desire to become less dependent on Russia, or because Russia is holding back volumes, for example due to disagreements about the currency in which gas should be paid.

He also did not rule out stopping flows through Ukraine if the war prevented the safe continuation of the pipeline.

The largest consumers of Gazprom’s gas in Europe in 2021 were Germany (45.8 billion cubic meters), Italy (20.8 billion cubic meters) and Austria (13.2 billion cubic meters).

Russia is Germany’s main supplier, supplying just under a third of its gas, while Italy receives about 40% of its imported gas and Austria 80% of its natural gas.

So far, only Hungary has agreed to switch to the “gas for rubles” scheme, in which buyers make payments in foreign currency through the Russian “Gazprombank”, which subsequently converts it into rubles.

Last week, an internal note from the European Commission said that the payment of Russian gas in rubles by buyers from the European Union would violate the EU sanctions regime against Moscow.

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