Page 84 - Russia OUTLOOK 2023

has no plans to embargo Russian gas imports. "Concerning an embargo on
imports of Russian gas in the same format as an oil embargo that the EU
introduced in the framework of the measures against Russia, this is not on the
agenda," the source said. Late on December 15, the EU issued a statement
saying it needed to spur up negotiations with reliable partners to sign long-term
gas agreements, taking into account the prospects of the 2023-2024 winter.

Gas production in Russia in January-November 2022 decreased by 11.6%
compared to the same period last year and amounted to 612.9 bcm.

The main contribution to the overall dynamics was made by the decline in
production at Gazprom. The largest independent gas producers – Rosneft and
Novatek – showed an increase in production.

According to expert forecasts, if exports continue to decline, gas production in
Russia by the end of 2022 may decrease by about 11% and amount to 677
bcm.

According to preliminary data, natural gas production by Gazprom
dropped by 19.6% y/y to 394.1 bcm YTD in December. Gas exports to
non-CIS countries fell by 45.1% or by 80.2 bcm over the last 11.5 months, the
Russian gas holding said. The average daily export of Gazprom gained 30% in
December against November to 173.3 mcm. Gas demand on the domestic
Russian market contracted by 5.2% or by 12.5 bcm.

According to the results of 2022, Gazprom Mezhregiongaz plans to
supply 253 bcm of gas to the Russian market, Deputy CEO of Gazprom
Mezhregiongaz Yury Pakhomovsky said on December 15. The company noted
a growing trend in gas consumption. Thus the most noticeable growth in gas
consumption this year will be because of population – an increase of 4.3 bcm
compared to the plan. The company forecasts an increase in gas supplies to
the Russian market by 2025 of at least 15 bcm from the resources of
Gazprom, and by 2030 the growth may reach 50 bcm, Pakhomovsky said.

Gas exports from Russia dropped sharply after the start of the war in
Ukraine. According to Vedomosti calculations based on data from the
European Network of Gas Transmission System Operators (ENTSOG), at the
end of November 2022, Russia supplied the European Union with, on average,
76-77 mcm of gas per day against 368-377 mcm at the end of November
2021. The main route for the supply of Russian pipeline gas to the EU is now
transit through the gas transmission system of Ukraine (on average 42-43
mcm per day). The rest is exported to the EU via TurkStream. Gas supplies via
Nord Stream were completely stopped at the end of August, exports via the
Yamal-Europe pipeline have not actually been pumped through since the end
of 2021, and Nord Stream 2, completed last autumn, has not been launched.

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