Page 113 - RusRPTFeb23

9.1.1c Gas sector news
The price of gas in Europe at the start of the trading session on January 4 fell below $750 per 1,000 cubic metres for the first time since February 18, 2021, according to London’s ICE exchange. The price of February futures at the TTF hub in the Netherlands fell to $733 per 1,000 cubic metres, or 67 euro per MWh (based on the current euro/dollar exchange rate, ICE prices are presented in euro per MWh). Gas prices are falling as Europe experiences mild weather.
The EU has become the world leader in LNG import. According to 2022’s results, the European Union became the world's largest buyer of liquefied natural gas, ahead of China, Japan, and South Korea, according to data from Refinitiv. Thus, against the background of a sharp reduction in the supply of Russian pipeline gas, EU countries increased LNG purchases by 58%, up to 101mn tonnes. This is equivalent to 137bn cubic metres of natural gas. This is exactly the volume that the Russian Federation delivered to the EU in 2021. Last year, the volume of supplies from the Russian Federation fell by more than half to 60bn cubic metres. As a result, the EU imported 24%, Japan 17%, China 15%, and South Korea 11% of total global LNG deliveries. The share of liquefied gas in Europe's consumption increased 1.75 times, from 20% to 35%, while the share of Russian gas fell to a third of its previous level, from 40% to 15%.
Russian gas supplies to China via the Power of Siberia pipeline increased 1.5-fold year on year in 2022 to a record 15.5bn cubic metres, Vedomosti daily reported citing the estimates of the Deputy Prime Minister and ex-Energy Minister, Alexander Novak. As followed by bne IntelliNews, Gazprom and Chinese CNPC are working to expand their business as Russia attempts to switch its gas export business from West to East. Gazprom's total exports to China will reach 48 bcm of gas per year in the coming years, although no firm deadline was mentioned. The Power of Siberia pipeline supplies Russian gas to China under a long-term agreement between Gazprom and CNPC, which was signed in 2014. The projected capacity of the pipeline is 38 bcm annually, which is planned to be reached gradually after 2024. In October 2022, Novak forecasted that the projected throughout will be achieved in 2027. The main resource base for the pipeline is the Chayandinskoye field in Yakutia (gas reserves of 1.2 trillion cubic metres) and the Kovyktinskoye field in the Irkutsk Region (1.8 tcm) of Gazprom. Analysts polled by Vedomosti expect a significant increase in gas deliveries through the Power of Siberia in 2023, possibly exceeding 20-22 bcm. On January 4 Gazprom reported that this year the company reached "a fundamentally new level of daily deliveries stipulated in the contract for 2023", without providing exact numbers.
In the first days of January Gazprom set new daily records for the volume
113 RUSSIA Country Report February 2023 www.intellinews.com