Page 30 - RusRPTAug22

James Henderson of the Oxford Energy Institute expects Gazprom's revenues to "surge" under such conditions. “The dramatic rise in prices – right now they are 10 times higher year-on-year, and 6 times yearly average – more than compensates for the loss in volumes. How long this situation will continue is another question - it depends on many factors. But in the next two years, until 2024, the market will remain very tight, and prices will be 2-4 times higher than 2019 levels, ”said Henderson.
Marcel Salikhov assumes that the cost of exporting pipeline gas by the end of 2022 will grow by 50-60%, which will allow Gazprom's revenue, even taking into account the strengthening of the ruble and the reduction in demand for gas in the domestic market, to grow by 15-20% compared to 2021 .
Can Europe refuse Russian gas
In May, the European Commission approved the REPowerEU plan, which provides for a complete renunciation of Russian energy imports (including gas) by 2027. But cutting supplies from Russia as part of a gas war could force the EU to act faster, according to a June report from the International Rating Agency (IEA).
The nearest plan of the European Commission is the already mentioned voluntary reduction of fuel consumption by countries by 15% from August 1 to the end of March 2023. In the event of a state of emergency (which could be a complete shutdown of Russian gas), the reduction will become mandatory. However, the proposals of the European Commission still have to be approved by at least 15 of the 27 EU countries, where at least 65% of the population of the alliance lives. Some countries are already opposing coercive measures, pointing to their own efforts to reduce consumption. Spain and Portugal, less dependent on Russian gas, spoke out publicly against it.
The plan is expected to be implemented by reducing the operation of air conditioners and heating systems, introducing market mechanisms (for example, tenders and auctions that would stimulate the reduction of fuel consumption) and switching to other energy sources, including oil, coal and nuclear energy.
Work on the search for alternative energy sources is already in full swing. The Netherlands, Germany and Austria restarted coal-fired plants in the last decade of June, and in Germany the ruling Green Party, which grew out of the anti-nuclear movement of the 1970s, is considering extending the life of the last three nuclear plants beyond December 2022- go (the rest were closed after the Fukushima accident).
The June report of the IEA analyzes the prospects for Europe to withdraw from Russian gas outside of emergency scenarios. The IEA's baseline scenario is based on the fact that Gazprom's long-term contracts for gas supplies to Europe, which are gradually expiring, will not be extended. In this scenario, imports from Russia will decrease by 55% compared to 2021, to about 70 bcm. In a more active substitution scenario, Russian exports to Europe could drop to 30 bcm by 2025.
In order to move on a trajectory of active replacement, the IEA advises Europe to take a number of measures as soon as possible:
30 RUSSIA Country Report October 2020 www.intellinews.com