Russia projects higher gas exports this year amid energy crunch

Russia projects Gazprom PJSC’s gas supplies to key markets, including Europe, Turkey and China, will grow to 197.3 billion cubic meters this year, as the world’s energy markets are battling the worst supply crunch in decades.

The figure, which is 10% more than last year, is also slightly above Gazprom’s own conservative outlook for 2021. The Russian gas producer earlier said it sees flows to Europe and Turkey at 183 billion cubic meters, while supplies to China are expected at 8.5 billion cubic meters.

Europe, the single-largest buyer of Russian natural gas, is starting its heating season with abnormally low levels of gas in its inventories. Regional benchmark prices have surged to record-highs, boosted by intense maintenance at Norwegian gas fields earlier this year and competition with Asia for liquefied natural gas cargoes.

The projections form part of the macroeconomic outlook seen by Bloomberg News and used by the Russian government to draft the nation’s 2022-2024 budget. The actual 2021 exports may differ from the outlook as Gazprom makes the final decision on supplies, based on the market situation, client requests and own production capacities.

Gazprom, which last year provided a third of all gas consumed in Europe, has faced criticism and accusations of intentionally capping export flows to Europe in the past couple of months to force a fast approval of its controversial Baltic gas pipeline Nord Stream 2. 

Yet the main European clients of the Russian gas giant said they are receiving requested gas fully in line with contracts. Gazprom itself said it is aiming to deliver extra gas under the long-term deals “whenever possible.”

The Economy Ministry, which participates in preparing the macroeconomic outlook, didn’t respond immediately to Bloomberg request for a comment.