Gazprom Exports Less, Earns More, But This Is a Short-Term Situation

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Russian gas exports have seen a significant decline in Europe, and such a decline will only increase further next year as a result of the shutdown of Nord Streams 1 and 2, as well as Putin’s decision to wage an energy war with the West. Gazprom earned a lot of money this year due to high gas prices. Europe may be in for a tough winter or two with tight supply, but the old continent’s economic and financial capacities are far greater than Russia’s, and the question is how comfortable the Kremlin is with losing its biggest gas export market for years in the future


Author: Vladimir Petreski


Exports of Russia’s state monopoly (the only one with a license to sell natural gas abroad), Gazprom, outside the countries of the former Soviet Union (Baltic countries, Ukraine, Belarus, the Caucasus, and Central Asia) plunged 43 percent in the first 10 months of the year.

This export reached only 91.2 billion cubic meters (billion m³), ​​which is 67.6 billion m³ less than in 2021. The EU countries have the largest share in the decline of this export, by 36 billion m³ less, and Great Britain by 4 billion m³ less compared to 2021. This figure is expected to increase even more next year, because the Nord Stream 1 gas pipeline, which had a capacity of 55 billion m³ per year, is now almost permanently disabled for gas transport. As a result, next year no gas will arrive through it, which was not the case this year, especially in the first 4 months of the year, when the gas pipeline was functioning more or less normally.

This situation applies also to the twin pipeline Nord Stream 2, which is also disabled, and whose purpose, like the first, was to transport gas from Russia under the Baltic Sea to the north of Germany. However, Nord Stream 2, apart from trial quantities, never operated on a commercial basis before underwater explosions destroyed these two pipelines by as-yet-unknown perpetrators in late September of this year.



On the other hand, the level of Russian gas exports to China, which takes place through the Trans-Siberian gas pipeline with a capacity of 50-61 billion m³, is growing this year compared to 2021. Russian gas exports to China have never reached anywhere near levels that would be close to fulfilling the capacity of this pipeline. In addition, this export can in no way replace the European one due to the higher costs and much lower export prices. China is neither willing nor able to pay market prices for Russian gas, as it does when exporting gas to Europe. In addition, when it comes to exporting gas to China, Russia has a lot of competition from Central Asian countries, which also have large gas reserves and have been exporting to China for a long time. Thus, for example, the Galkunush field in Turkmenistan has deposits of 27 billion cubic meters of gas and is the largest gas field in the world. Turkmenistan is the largest gas supplier to China for more than a decade with a quantity of 34 billion m³ in 2021, and this quantity is expected to increase to 60 billion m³ of gas after another, the fourth gas pipeline is built between the two countries with the capacity of 40-55 billion m³ of gas per year.

Fearing a shortage of gas, the EU filled its storage with this energy to the level of 94 percent this year, in contrast to last year when this percentage was 77 percent. This situation led to gas prices turning negative last week, meaning traders were paying buyers to release excess gas they could not sell so that transport and storage infrastructure could then be used for other deals. In addition, the weather conditions across Europe this fall are very favorable, without cold, which does not favor Russian President Vladimir Putin in the exercise of his energy war with the West, as the demand for gas has remained low.

However, this does not mean the EU will not face supply problems if this winter does turn out to be cold. The situation is also uncertain when it comes to the future winter because it is still not clear whether Europe will be able to procure enough gas and whether it will be able to build enough capacities to convert the gas arriving in a liquid state (LNG – liquid natural gas) from the USA and the Middle East in specialized tankers into a gaseous state. Therefore, the winter of 2023/24 may be difficult, but then, when it comes to the winter of 2024/25, the situation should start to stabilize even if it remains the same as now, that is, if Russian gas continues to not be present in Europe in significant quantities. Simply put, after two years Europe is expected to find new sources of gas or to recalibrate the energy mix, that is, to turn to other energy sources in the short or medium term. However, it is much more likely that Russian gas will return to the European continent in some form and in larger quantities, but the question is only when, that is, after how long. Moreover, if Europe can afford to pay more for gas over a period of two or three years, Russia can hardly afford to be without its largest gas export market for an extended period.



Otherwise, despite the fact that Gazprom’s exports, except for the countries of the former USSR, recorded a drop of 43 percent, and despite the fact that we recently saw negative gas prices, Gazprom is expected to record far greater profits this year than last year. The decrease in gas availability has caused price shocks, which dramatically increase its price. Thus, if last year with an average price of 310 dollars for 1,000 m³ of gas Gazprom recorded a profit of 54 billion dollars from exports, for this year, with a drop in exports of 43 percent, but with an average price of 1,000 dollars for 1,000 m³ of gas it is expected the profit of the Russian gas export giant to reach 100 billion dollars.

Before the Nord Stream 1 and 2 explosions, analysts estimated that Gazprom was earning 250 million euros a day from exports. In the first half of 2022, Gazprom had a net profit of $41.75 billion, compared to $29 billion last year. From this year’s profit, Gazprom awarded dividends in the amount of 20 billion dollars to the Russian state.

Moreover, the total gas production of Gazprom, intended for all markets (domestic, former USSR, Europe, Asia, etc.) for the first 10 months was 344 billion m³, which represents a drop of 19 percent compared to the same period last year.



This article has been produced within the project Promoting Access to Reliable News to Counter Disinformation, implemented by the Metamorphosis Foundation. The article, originally published by Truthmeter,, is made possible by the support of the American non-profit foundation NED (National Endowment for Democracy). The content of this article is the responsibility of the author and does not necessarily reflect the views of Metamorphosis, NED or their partners.




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