Natural gas production in Russia was at an all-time high in 2017

23 may 2018

Irina Pominova, Deputy Head of the Directorate for Fuel and Energy Economy of the Analytical Center, spoke at a round table on Russia and Germany: relevant issues of the international agenda against a backdrop of both countries experiencing problems, which was held at the press center of the Russia Today media agency.

"First of all, I would like to draw your attention to the record high output of the Russian natural gas industry as a whole and Gazprom PJSC in particular in 2017," the expert said. "Natural gas production in Russia was at an all-time high of 691 bln cubic meters (+7.8%), while exports reached 227 bln cubic meters (+6.1%)." Herewith, Germany is the main destination for Russian natural gas exports: in 2017, Russia shipped over 52 bln cubic meters of natural gas to Germany (+6.7%), which is 23% of our total natural gas exports, while the share of Gazprom PJSC in total sales is 28%. The analyst believes that the sales grew as a result of weather conditions and other external causes. "The amount of natural gas that the EU needs to import is increasing as a result of rising demand and reduction of domestic production in the Netherlands, Norway, the UK as well as in Germany, which produces some 6-7 bln cubic meters per year, while consuming over 80 bln cubic meters," Ms. Pominova explained.

Despite the difficulties that coordination of the North Stream-2 has run into, it was announced on May 15 about preparations start in the maritime area in Germany, the analyst noted. "Germany has become the first country to have issued all the necessary permits for the construction of the gas pipeline. Nevertheless, Germany specifies a prerequisite for the implementation of the project: transit of natural gas across Ukraine must be kept in place as it allows Ukraine to make some USD 2 bln a year. In 2017, about 94 bln cubic meters of Russian natural gas was shipped to the EU through Ukraine. Meanwhile, late last year North Stream-1 was running at 110-120% of its design capacity. The capabilities and conditions for the continued transit of Russian natural gas across Ukraine were one of the topics of discussions during the visit to Moscow of the German Minister Peter Altmaier on May 14-15, but it's not yet known whether anything was decided during those discussions," Ms. Pominova said.

The expert believes that the USA is putting additional pressure to get North Stream-2 shut down and they have already added it to their sanctions list. The USA regards the EU as a potential market for its liquefied natural gas but LNG still costs significantly higher than the Russian gas delivered to the EU via pipeline, Ms. Pominova noted.

Source: INA Rossiya Segodnya

Photo: INA Rossiya Segodnya