Russia’s natural gas production is expected to hit a record high this year, breaking the 2021 record, but this winter’s deliveries to Europe have been well below normal.
In 2021, Russia’s natural gas production is expected to have risen 10% year-on-year to a record 762 billion cubic meters (bcm), the International Energy Agency said on Monday. (IEA) in its quarterly report on the gas market.
The gas giant Gazprom alone accounted for 80% of the increase in gas production, with production close to 513 billion cubic meters. This is the highest level since 2008, although below the company’s official production capacity of 550 billion m3, the IEA said.
In 2022, the agency’s estimates indicate that Russian natural gas production will reach another record high of 763 billion m3.
Despite record natural gas production, Russia has not sent much more than its contractual obligations to Europe this winter. This, combined with low levels of storage at European sites, has led to a shortage of natural gas in Europe and record prices that have driven up electricity prices and weighed on many energy-intensive businesses in Europe.
In the fourth quarter of 2021, Russian pipeline exports fell nearly 25% annually due to lower transit flows through Belarus and Ukraine and reduced deliveries to Turkey, the IEA said. in its quarterly report.
The agency was among many industry voices blaming Russia for the energy crisis in Europe.
Low supplies of natural gas from Russia appear to have artificially tightened the European gas market, IEA Executive Director Fatih Birol said earlier this month, adding that energy systems “face significant risks” by relying too much on a single supplier for a key energy source.
“We see strong elements of ‘artificial tightness’ in European gas markets, which appear to be due to the behavior of the Russian state-controlled gas supplier,” Birol wrote in a LinkedIn post this month.
The Russian-Ukrainian crisis is another concern for gas and commodity market analysts. Military action could disrupt Russian supplies to Europe, while the United States could destroy the Nord Stream 2 gas pipeline still waiting to become operational if Russia invades Ukraine.
By Tsvetana Paraskova for Oilprice.com
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