Russia''s Gas Export Strategy: Adapting to the New Reality
After a year of adapting to the shocking reduction in gas exports to Europe, Russia''s ambitions to remain a significant gas market player have not dimmed.
But even if Russia's gas export volumes were to return to pre-war levels, revenues from gas and LNG exports are not likely to reach their prior levels—due to both a less favorable price landscape after 2026, when higher global volumes are expected to come onto the market, and higher transaction costs due to longer, more expensive routes.
Exports to Europe (including Turkey) still account for slightly under half of Russian gas exports. Following the start of the war in Ukraine and the cuts by Russia to EU countries, [iv] Russia's pipeline exports to the EU collapsed from 140 bcm in 2021 to 63 bcm in 2022 and around 27 bcm in 2023.
In this commentary, the authors explore how Russia's export strategy has evolved over the past year in the face of mounting adversity and what it means for the world. In 2023, Russia exported an estimated 142 bcm of gas, down sharply from around 244 bcm in 2021.
Russian LNG exports, however, have remained relatively stable, hovering between 41 and 45 bcm/y between 2021 and 2023, with heavy maintenance at the Sakhalin-2 and Yamal LNG liquefaction plants last year. [viii] Around half of this LNG is exported to EU countries, a trend that has been increasing since 2021.
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