Page 113 - RusRPTSept22

9.0 Industry & Sectors 9.1 Sector news
9.1.1a Oil & gas sector results
Russia is stuck with a pipeline system built to supply Europe in the 1970s. Notwithstanding the present gas war, it's in Russia's interest to continue providing Europe with gas while it builds a new pipeline to China. It risks losing around $240bn in revenue in 2023-2029 if it cuts off gas exports to Europe.
Russian gas production shrank by 7% from the 2021 level in the first half of the year but almost completely collapsed over the summer, according to Rosstat, reports the Bank of Finland institute for Emerging Economies (BOFIT).
The gas company Gazprom announced that its own production decreased by 12% in January-July compared to the previous year. Gazprom's share in Russian gas production is about two-thirds, but the company has a monopoly position in the export of pipeline gas.
The significant decrease in Gazprom's gas production is due to the reduction in export volumes. According to Gazprom, exports to Europe (including Turkey) decreased by 35% in January-July compared to the previous year. Although exports to China have grown rapidly, the quantities are still very small.
Gas exports to EU countries have literally collapsed during the summer. The Yamal-Europe pipeline that runs through Poland is completely out of use, gas is exported through Ukraine through only one compression station (Sudza) and the NordStream running at the bottom of the Baltic Sea is only in use at a fraction of its capacity.
In July, EU countries imported pipeline gas from Russia about 75% less than a year earlier. If exports remain at this level, Gazprom's production will also collapse.
According to BP's statistics, Russia's gas exports in 2021 totalled 241bcm, of which the majority, or 20bcm, was traditional pipeline gas. Of that, 167bcm or 83% was exported to Turkey and Europe, 13% to the territory of the former Soviet Union and 4% to China. Almost 40bcm of liquefied natural gas (LNG) was exported from Sakhalin and Yamal. 44% of LNG exports went to Europe, 22% to Japan and 6% to China.
113 RUSSIA Country Report September 2022 www.intellinews.com