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Share of Russian gas in EU to drop to lowest level in over 20 years in 2022, says IEA

Last year Russian gas ensured around 40% of Europe’s demand, the agency informed

MOSCOW, July 5. /TASS/. The supplies of Russian pipeline gas to Europe may plunge by 45% this year to less than 80 bln cubic meters, whereas LNG deliveries from Russia to the EU will rise, the International Energy Agency (IEA) said on Tuesday.

The share of Russian gas in EU gas demand is expected to drop to just 25% in 2022, its lowest level in more than two decades, the agency said in its Gas Market Report. Last year Russian gas ensured around 40% of Europe’s demand, with the European Union accounting for 60% of Russia’s gas exports and around 70% of its gas export revenues, according to the IEA.

"The drop in Russian pipeline supplies continued in H1 2022, falling by 30% y-o-y. Gazprom’s unilateral supply cuts to several EU member states in Q2 further contributed to lower deliveries and heightened market uncertainty. The company sharply reduced gas supplies via Nord Stream in the second half of June. Assuming that flow patterns remain unchanged, EU imports of Russian pipeline gas are set to decline by over 45% in 2022 to below 80 bcm, while Russian LNG inflows are expected to be sustained at above last year’s level," the report said.

The agency expects Russian pipeline supplies to the European Union to decline by over 55% by 2025 compared to their 2021 levels, with Russia meeting 20% of EU gas demand. "This is based on the gradual expiry of Gazprom’s long-term supply contracts and the assumption that the sanctions imposed by Russia will restrict the use of the Yamal-Europe pipeline and prevent gas deliveries to Gazprom Germania’s daughter companies over the medium term," according to the report.

In an accelerated case Russian pipeline gas exports to the EU may fall by over 75% by 2025 compared to 2021.

Altogether, Russian gas supplies to the European Union could fall by over 120 bln cubic meters per day from their 2021 levels to just 30 bln cubic meters by 2025, the IEA believes. "This would effectively reduce Russia’s share of total EU gas demand to below 10%, putting it on a pathway to zero by 2027," the report said.