East Reorientation is a Matter of Long Time

Russia will be able to increase gas supplies to Asian markets to a level close to last year's export volumes to the EU, no earlier than in 10 years. This forecast was given by analysts from the International Energy Agency (IEA). They also expect a decline in gas production in Russia in 2022-2025 by 480 billion cubic meters.


In the quarterly review of the Gas Market Report, the IEA predicts that, at best, Russia will need at least 10 years to increase gas supplies to Asian markets to a level close to 155 billion cubic meters, which it exported to the EU in 2021.

According to analysts' expectations, by 2025, the supply of piped and liquefied Russian gas to Asia may reach a little more than 70 billion cubic meters per year.

Sanctions restricting access to major markets and key energy technologies are expected to be the main containment factors. It is expected that this will lead to a decrease in gas production in Russia to 668 billion cubic meters in 2022 compared to 762 billion cubic meters in 2021. The cumulative decrease in gas production in the Russian Federation for 2022-2025 may amount to 480 billion cubic meters compared to the previous forecast of the agency.

The fields in Eastern Siberia, working for Russian export to China, will be the most resilient. Gas imports oriented to China will grow by almost 60% by 2025, to 85 billion cubic meters, largely due to the growth of supplies through the "Power of Siberia" pipeline to 38 billion cubic meters with 10 billion cubic meters in 2021.

The developments in Western Siberia and Yamal will be effected significantly, due to their European orientation. In 2022, the drop in pipeline exports to the EU will be more than 45% and will stop at 80 billion cubic meters. This means that the share of the Russian Federation in the total structure of EU imports will fall to the lowest level in more than 20 years (to 25%). This forecast assumes the gradual expiration of Gazprom's long—term contracts for supplies to the EU while maintaining restrictions on the use of the Yamal-Europe pipeline and problems with supplies to Gazprom Germany subsidiaries.

It is expected that in 2022-2025, the EU will increase LNG imports to about 120 billion cubic meters, 55% above the level of 2021, mainly at the expense of the United States.

Source: Kommersant

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