Europe
Russia gas output slumping below pre-war level
Bloomberg
October 2, 2024
Russia’s gas output slumped in late 2022 and kept falling through the first half of 2023, as the nation all but cut off pipeline flows to European buyers following the invasion in Ukraine. Now production is rebounding as the nation’s largest gas producer Gazprom PJSC sees higher demand at home and growing exports to China and Central Asia. (Andrey Rudakov/Bloomberg)
Russian natural gas output rose almost 9% during the first nine months of this year, putting it on track to meet a government target but still far short of levels before the invasion of Ukraine.
About 515 billion cubic meters of gas was produced between January and September, according to Bloomberg calculations based on industry data. That includes almost 464 billion cubic meters in the first eight months of the year, plus just over 45 billion cubic meters in the first 26 days of September, according to a person familiar with the preliminary results. If Russian gas companies continued to produce at the same pace, the September total would have been around 52 billion cubic meters.
That leaves Russian gas output close to the government’s 10% annual growth target, as the Kremlin seeks to bolster revenues to fund its war in Ukraine. But that’s still below production in 2021, the last year before the invasion. All the data include flared gas volumes.
Russia’s gas output slumped in late 2022 and kept falling through the first half of 2023, as the nation all but cut off pipeline flows to European buyers following the invasion in Ukraine. Now production is rebounding as the nation’s largest gas producer Gazprom PJSC sees higher demand at home and growing exports to China and Central Asia.
Russia’s gas output in 2023, including flared volumes, reached just over 659 billion cubic meters, according to historic data seen by Bloomberg. The targeted 10% hike would bring volumes to around 725 billion cubic meters this year. Russian officials put 2023 production at 637 billion cubic meters, excluding flared gas. A 10% hike would take gas output to around 700 billion cubic meters this year.
Arctic LNG 2
Fields feeding the sanctioned Arctic LNG 2 produced just under 314 million cubic meters of gas over Sept. 1-26. That means the project’s output for the whole of last month was probably close to August’s near-record levels, Bloomberg calculations show.
The robust output may have allowed the facility to process gas at the August pace, using the remaining few weeks left in the Arctic summer navigation season for loading cargoes.
Novatek PJSC, which leads the Arctic LNG 2 project, didn’t immediately respond to a request for comment. Arctic LNG 2 has become a target for tougher western sanctions in the past year as the U.S. and its allies consider the project a source of future revenues for the Kremlin’s increasing military spending.
The September industry data seen by Bloomberg does not disclose Gazprom’s gas output. Yet the combined production of the category in which its volumes are included — and where Gazprom is by far the largest producer — reached 29.5 billion cubic meters over Sept. 1-26. That’s more than 65% of the nation’s total.
If the companies included in this category pumped gas at the same average daily pace through the rest of the month, the combined September volumes would have reached just over 34 billion cubic meters. That’s only slightly below the August output for this category, according to the person familiar with the data.
Gazprom didn’t immediately respond to a request for comment.
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