In response to a sharp decline in deliveries to Europe, Russia’s gas giant, Gazprom, reported on Tuesday that its natural gas exports fell 36.2% to 78.5 billion cubic metres between January and mid-August. According to a Gazprom statement, natural gas production decreased as well, falling 13.2% to 274.8 billion cubic metres from January 1 through August 15 compared to the same period in 2021.
Since the start of the Russian war with Ukraine, including by stopping deliveries to Poland, Bulgaria, and Finland, Gazprom has reduced supplies to EU members. Two months ago, Russia dramatically reduced gas delivery to Germany via the crucial Nord Stream pipeline to 40% of capacity.
At the end of July, after a 10-day period of routine maintenance, Gazprom further reduced Nord Stream flows to 20% of the pipeline’s capacity. The Russian reason for the considerably reduced gas flows to Europe was that a different turbine at a compressor station was sent for maintenance, and the turbine Canada returned from maintenance has not yet been fitted.
While the EU has cut its reliance on Russian gas imports by 50%, savings will still be required to make up the gap with other sources of supply.
Additionally, on Tuesday, Gazprom issued a warning that this winter’s benchmark gas prices in Europe may increase by 60%. Since supplies of other fuels for power generation are being limited by low water levels on Europe’s primary petroleum transport corridor, the Rhine River, and strong demand due to a heatwave, gas prices in Europe have continued to rise this week.
On Monday, the benchmark gas price for Europe at the Dutch TTF hub increased by 2% to $215.50 (211.35 euros), while on Tuesday morning in Amsterdam, it increased by 5.9% to $243 (239.62 euros).