Experts told how Russia will compensate for the losses from the fall in gas exports by half

“This is the prospect of several years, if not decades”

According to the results of the current year, the export of Russian pipeline gas will be reduced by half – from 100 billion to 50 billion cubic meters, the Energy Commission of the State Council predicted. The reason is the sanctions and the refusal of Western countries from raw materials from the Russian Federation. To compensate for the losses, Moscow must make a truly titanic effort.

First of all, it is necessary to sharply increase domestic consumption – transfer transport to “blue fuel”, increase the level of gasification to 82.9% by 2030 and build 94 small-scale LNG plants by 2035. In addition, the production of nitrogen fertilizers should be more actively developed, as well as generating facilities should be converted to gas. This will allow more efficient use of unclaimed gas volumes.

The fall in Russian natural gas exports (along with a reduction in oil supplies due to the embargo and price ceiling) led to an increase in the budget deficit to 2.4 trillion rubles in the first quarter of 2023. The total revenues of the treasury amounted to 5.7 trillion rubles, which turned out to be 21% lower than the revenues for the first quarter of 2022. And oil and gas revenues collapsed by 45%, to 1.635 trillion rubles. The main prospects for increasing supplies are associated with China and Turkey: in particular, in 2025, Power of Siberia-1 is expected to reach its design capacity (38 billion cubic meters per year).

“In general, the figure of 50 billion cubic meters sounded from the lips of analysts back in January 2023,” recalls Artem Deev, head of the analytical department at AMarkets. – Moreover, it was a rather optimistic scenario – since at the level of deliveries that was maintained until recently, Russia will be able to export through pipes to Europe at most 25 billion cubic meters of gas. Compared to 2021, the drop is more than tangible – more than five times. But this, however, was expected, especially against the backdrop of the loss of Nord Stream 1. Even if we assume the incredible, and bilateral relations with the EU will return to normal, it will be necessary to restore the efficiency of at least one of the lines of this gas pipeline. So in the next couple of years we will hardly overcome the threshold of 50 billion cubic meters.”

The main LNG production facilities are now located in Yamal. And it is quite realistic to build 94 new small-scale plants in other regions by 2035: the energy industry took a course on this a few years ago, argues Deev. As for the expansion of the fleet of gas-powered vehicles, the expert does not share the mood of the profile commission of the State Council. That is, “riveting” the buses themselves is not a difficult task, but in order to use them later, an extensive refueling infrastructure is needed. And there are still problems with it, especially in remote regions.

“Russian gas supplies to Europe go only through the Turkish Stream and transit through Ukraine,” says Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation. – These are small volumes, in total 20-25 billion cubic meters are collected there. And I do not believe in the rapid gasification of Russia: this is a prospect of several years, if not decades. Its pace was not very high before, although in the last three years Gazprom has significantly increased its costs. The problem is that due to a radical reduction in export earnings, the company may not have enough funds to finance the gasification program on the same scale.”