NewsRussian gas exports to 'far abroad' continue to decline, despite increased sales to China

Russian gas exports to 'far abroad' continue to decline, despite increased sales to China

Władimir Putin
Władimir Putin
Images source: © Bloomberg via Getty Images | Bloomberg

9:24 AM EST, February 2, 2024, updated: 4:28 AM EST, March 7, 2024

The gas monopolist - a pillar of the Russian economy - sold to 'far abroad' countries, defined as Europe (excluding the Baltic states), Turkey, and China, a total of approximately 2.45 trillion cubic feet of natural gas, according to estimates provided by the Argus Gazprom agency.

This represents another successive annual drop in this sector. The volume of gas exported fell by almost 33 percent compared to 2022, as per the Center for Eastern Studies, when nearly 3.57 trillion cubic feet of natural gas were shipped to these regions.

Gazprom suffered the most significant loss in the European market, where it provided only about 0.92 trillion cubic feet of gas, marking a decrease of roughly 59 percent compared to the previous year.

There was also noticeable contraction in Russia's second major market. In 2023, Turkey received 0.72 trillion cubic feet of pipeline gas from Russia, down from 0.77 trillion cubic feet in 2022.

"This is what the full crash of Gazprom looks like, as far seen through estimates," assessed OSW analyst Filip Rudnik.

The Russian behemoth has been compensating for losses by increasing exports to China, which has emerged as its most crucial market and the most prominent single importer of Russian gas. Through the Siberian Force-1, Russia exported 0.8 trillion cubic feet of raw material there, a rise of 47 percent compared to 2022 levels.

"Making up for the 'lost' volume in Europe by boosting Russian exports to other markets remains a plan for the distant future. Despite Moscow's intentions, China's position as the most significant gas recipient from Russia doesn't significantly accelerate Kremlin's goals to redirect sales from Europe to China," Rudnik contends.

Russia aims to boost its supplies to Europe in 2024, but the outlook is bleak, primarily due to the expiration of the transit contract between Gazprom and Ukrainian Naftohaz at the end of this year.

As OSE highlights, nearly half of the volume supplied to Europe passes through this route. The rest comes through TurkStream, where pipeline capacity imposes limitations.

Current gas transport routes to Turkey - one TurkStream line and BlueStream - allow for a maximum transfer of about 1.1 trillion cubic feet of fuel per year. Comparatively, the four Nord Stream lines have a total nominal capacity of 3.88 trillion cubic feet per year, as the expert notes.

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