BAKU, Azerbaijan, February 28. Russia's pipeline gas supply to the EU is expected to decrease by 40 percent, or 30 bcm, year-on-year in 2023, Trend reports via the latest gas market overview from the International Energy Agency (IEA).
Assuming that flows to the EU stay at their current level, Russian piped gas supplies to the EU could cease completely, which would put further pressure on markets, the agency noted.
Russian pipeline gas exports to OECD Europe over the last year fell by about 50 percent (83 bcm) year-on-year - to the lowest level since the mid-1980s. While supplies to Türkiye fell by 18 percent year-on-year, gas supplies to the EU more than halved, resulting in a 78 bcm decrease.
"Gazprom unilaterally cut gas supplies to several EU member states during the second quarter of 2022, following their refusal to adhere to a new payment system imposed by Russia. Russia introduced a range of sanctions on European companies in May, following which Gazprom announced that it would cease to use the Yamal - Europe pipeline. Gazprom gradually reduced gas flows via Nord Stream from mid-June and by the end of August had halted gas supplies completely via the pipeline. Hence, only three pipeline systems – the Ukraine transit route, Blue Stream and TurkStream – remained operational from September. Nord Stream and Nord Stream 2 suffered an act of sabotage at the end of September, with preliminary investigation finding traces of explosives. Russian piped gas supplies to OECD Europe fell by an estimated 70 percent (25 bcm) year-on-year in the fourth quarter of 2022," the report noted.
According to the IEA, the sharp decline in Russian pipeline gas supplies and the stagnation of domestic production outside Norway were offset by increased pipeline supplies from alternative sources and record LNG inflows.
"Pipeline flows from Norway rose by 3 percent (or 4 bcm) in 2022, with deliveries increasingly rerouted towards the EU (up by 9 percent) at the expense of the UK (down by 14 percent). Gas supplies from Azerbaijan via the Trans Adriatic pipeline surged by 40 percent (or 3 bcm) y-o-y in 2022, while North African gas flows fell by 10 percent (or 4 bcm) due to the nonavailability of the Maghreb - Europe pipeline and lower Libyan flows. LNG imports surged by 60 percent to close to 170 bcm – their highest level on record. LNG supplies from the US to the EU totaled at 25 bcm in the second half of 2022, standing well above Russia’s piped exports," the report said.
At the same time, the IEA expects the EU's LNG imports to increase by almost 7 percent, although a stronger recovery in China's LNG imports may limit this growth by just 3 percent.