espite numerous attempts to find an alternative to gas supplies from Russia, the EU remains heavily dependent on Russian energy. In 2021, Moscow supplied Europe with 40% of its natural gas and this year the bloc plans to significantly reduce imports from the Russian Federation. Quite aware that it will sooner or later lose the European market, Russia seems to plan to fundamentally reorient its gas export policy from “the old continent” to China.
The West has recently accused Moscow of using gas as a weapon in order to achieve some of its geopolitical goals. The EU is claiming that Russia is blackmailing the Bloc in an effort to relieve pressure over the war in Ukraine—something that the Russian officials vehemently deny. According to the Kremlin spokesman Dmitry Peskov, Russia is “not interested in a complete cutoff of its gas deliveries to Europe.… However, if Europe continues its course of absolutely recklessly imposing sanctions and restriction, the situation may change.” In other words, Russia may not completely halt gas supplies to the EU in the near future, but its energy giant Gazprom will almost certainly continue sending a more limited volume of natural gas to Europe.
The recent Nord Stream 1 turbine saga has clearly showed that the Kremlin intends to continue using energy as a method to pressure the European Union. In June, Moscow cited the delayed return of turbine equipment as the reason behind the reduction in natural gas coming from the Nord Stream 1 pipeline. It is, however, questionable if technical problems are the only obstacle impacting gas supplies from Russia to Europe. Even some Russian energy experts insist that Moscow is using the issue of turbine repairs as a pretext for cutting gas. On the other hand, it is widely believed in Russia that it is the EU creating the energy crisis by refusing to open the Nord Stream 2 pipeline. However, given that the EU aims to end its energy dependence on Russia, it is unlikely that the Nord Stream 2 pipeline will become operational any time soon.
With Russia weaponizing the flow of gas, the EU plans to replace two-thirds of Russian gas imports by the end of the year. Russia's reduction in gas flow via the Nord Stream 1 pipeline will likely make it impossible for most EU members to refill their gas storage to 80% capacity ahead of winter, but it remains dubious if other major producers will manage to replace Russia as Europe’s major gas supplier—at least in the short term.
At the Gastech conference—the world’s largest gas forum which will occur Milan this September—European and global energy leaders are expected to discuss a joint response to the ongoing gas crisis and chart a roadmap for the future. Often a bell-weather for industry sentiment, the conference is expected to highlight the crucial role of liquefied natural gas (LNG) supplies in alleviating Europe’s energy predicament.
Some EU members have already started building LNG terminals—facilities designed to accommodate large LNG carrier ships—while some landlocked EU states plan to use the existing LNG infrastructure to ensure their energy security. There are also reports suggesting that nations such as Latvia, Lithuania, Estonia, and Finland have managed to significantly reduce gas consumption, an important part of the EU’s plan to cut down gas consumption by 15% by next March.
Still, Russian energy experts remain skeptical about the EU’s ability to survive without Russian gas supplies. Some even claim that Europe will “freeze to death” without Russian gas. It is worth remembering that in 2014, when the Donbass war erupted, the Kremlin’s propaganda insisted that Ukraine would not survive without Russian gas. Yet, eight years later, Ukraine is still alive and the EU will unlikely face a “gas apocalypse.” However, given that the EU imports 169 billion cubic meters of Russian natural gas, even with a significant reduction in consumption, it remains unclear where the EU will replace this supply.
The European Union is actively seeking to make long-term deals with various energy-rich countries—from Israel to Azerbaijan and Nigeria. But as Russian energy analyst Vladimir Demidov has stated “Suppliers from the United States, Qatar and Africa can replace up to 60 billion cubic meters, but the additional problem is that the current supply of their LNG to Europe resulted in high prices in their domestic markets.” As such, most European countries will remain dependent on Russian gas for the next two to four years—all while preparing for the final energy divorce from Moscow.
For its part, Russia will likely attempt to move its energy flows eastward to China. The problem, however, is that the current Russian gas network supplying the People’s Republic has a rather small capacity. Russia only exported 16.5 billion cubic meters of gas to China in 2021—about 10% of the gas it sold to Europe. It is estimated that the Power of Siberia pipeline will be able to transport 38 billion cubic meters by 2025, a number that still pales in comparison to what Russia sells to Europe. It will take years before Moscow completes its ambitious gas pipeline projects in Asia.
Since sanctions will almost certainly have a huge impact on the Russia economy, it remains to be seen if the Kremlin will manage to fund the construction of the new gas infrastructure networks and help Gazprom to switch gas volumes from West to East. Meanwhile, after the EU imposes a full embargo on Russian gas and finalizes the divorce, Russia will have to reorient to being fully dependent on the Asian market.
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Europe Prepares to Divorce Russian Gas
Photo by Helio Dilolwa via Unsplash.
August 3, 2022
The European Union is preparing to cut itself loose from Russian natural gas. The Kremlin is deliberately reducing gas supplies to Europe—aiming to create a large-scale gas crisis in the coming winter writes Nikola Mikovic.
D
espite numerous attempts to find an alternative to gas supplies from Russia, the EU remains heavily dependent on Russian energy. In 2021, Moscow supplied Europe with 40% of its natural gas and this year the bloc plans to significantly reduce imports from the Russian Federation. Quite aware that it will sooner or later lose the European market, Russia seems to plan to fundamentally reorient its gas export policy from “the old continent” to China.
The West has recently accused Moscow of using gas as a weapon in order to achieve some of its geopolitical goals. The EU is claiming that Russia is blackmailing the Bloc in an effort to relieve pressure over the war in Ukraine—something that the Russian officials vehemently deny. According to the Kremlin spokesman Dmitry Peskov, Russia is “not interested in a complete cutoff of its gas deliveries to Europe.… However, if Europe continues its course of absolutely recklessly imposing sanctions and restriction, the situation may change.” In other words, Russia may not completely halt gas supplies to the EU in the near future, but its energy giant Gazprom will almost certainly continue sending a more limited volume of natural gas to Europe.
The recent Nord Stream 1 turbine saga has clearly showed that the Kremlin intends to continue using energy as a method to pressure the European Union. In June, Moscow cited the delayed return of turbine equipment as the reason behind the reduction in natural gas coming from the Nord Stream 1 pipeline. It is, however, questionable if technical problems are the only obstacle impacting gas supplies from Russia to Europe. Even some Russian energy experts insist that Moscow is using the issue of turbine repairs as a pretext for cutting gas. On the other hand, it is widely believed in Russia that it is the EU creating the energy crisis by refusing to open the Nord Stream 2 pipeline. However, given that the EU aims to end its energy dependence on Russia, it is unlikely that the Nord Stream 2 pipeline will become operational any time soon.
With Russia weaponizing the flow of gas, the EU plans to replace two-thirds of Russian gas imports by the end of the year. Russia's reduction in gas flow via the Nord Stream 1 pipeline will likely make it impossible for most EU members to refill their gas storage to 80% capacity ahead of winter, but it remains dubious if other major producers will manage to replace Russia as Europe’s major gas supplier—at least in the short term.
At the Gastech conference—the world’s largest gas forum which will occur Milan this September—European and global energy leaders are expected to discuss a joint response to the ongoing gas crisis and chart a roadmap for the future. Often a bell-weather for industry sentiment, the conference is expected to highlight the crucial role of liquefied natural gas (LNG) supplies in alleviating Europe’s energy predicament.
Some EU members have already started building LNG terminals—facilities designed to accommodate large LNG carrier ships—while some landlocked EU states plan to use the existing LNG infrastructure to ensure their energy security. There are also reports suggesting that nations such as Latvia, Lithuania, Estonia, and Finland have managed to significantly reduce gas consumption, an important part of the EU’s plan to cut down gas consumption by 15% by next March.
Still, Russian energy experts remain skeptical about the EU’s ability to survive without Russian gas supplies. Some even claim that Europe will “freeze to death” without Russian gas. It is worth remembering that in 2014, when the Donbass war erupted, the Kremlin’s propaganda insisted that Ukraine would not survive without Russian gas. Yet, eight years later, Ukraine is still alive and the EU will unlikely face a “gas apocalypse.” However, given that the EU imports 169 billion cubic meters of Russian natural gas, even with a significant reduction in consumption, it remains unclear where the EU will replace this supply.
The European Union is actively seeking to make long-term deals with various energy-rich countries—from Israel to Azerbaijan and Nigeria. But as Russian energy analyst Vladimir Demidov has stated “Suppliers from the United States, Qatar and Africa can replace up to 60 billion cubic meters, but the additional problem is that the current supply of their LNG to Europe resulted in high prices in their domestic markets.” As such, most European countries will remain dependent on Russian gas for the next two to four years—all while preparing for the final energy divorce from Moscow.
For its part, Russia will likely attempt to move its energy flows eastward to China. The problem, however, is that the current Russian gas network supplying the People’s Republic has a rather small capacity. Russia only exported 16.5 billion cubic meters of gas to China in 2021—about 10% of the gas it sold to Europe. It is estimated that the Power of Siberia pipeline will be able to transport 38 billion cubic meters by 2025, a number that still pales in comparison to what Russia sells to Europe. It will take years before Moscow completes its ambitious gas pipeline projects in Asia.
Since sanctions will almost certainly have a huge impact on the Russia economy, it remains to be seen if the Kremlin will manage to fund the construction of the new gas infrastructure networks and help Gazprom to switch gas volumes from West to East. Meanwhile, after the EU imposes a full embargo on Russian gas and finalizes the divorce, Russia will have to reorient to being fully dependent on the Asian market.
