Russia could see production loss of over 500 bcm of gas in 2022-2025 amid drop in exports to EU - IEA

MOSCOW. July 5 (Interfax) - Russia's cumulative gas production loss in 2022-2025 could total more than 480 billion cubic meters of gas amid sanctions and the European Union's decision to phase out Russian gas, the International Energy Agency (IEA) said in its quarterly Gas Market Report.

According to the IEA, Russia could see a production loss of close to 550 bcm in 2022-2025 if European countries phase out Russian gas at a faster pace.

"Upstream developments in western Siberia and the Yamal Peninsula are expected to be the most affected, while the production outlook for east Siberian fields is set to be more resilient," the report said.

According to the IEA's base scenario, exports of Russian pipeline gas to the EU will fall more than 55% by 2025 compared to the level of 2021, and the accelerated scenario predicts a drop of 75%.

"The huge uncertainties in this area are amplified by the possibility that Russia will further restrict its export flows unilaterally, as it has done already in 2022 to certain countries," the report said.

Pipeline supplies of gas from Russia to Europe fell 30% compared to last year in the first half of the year, the report said. This reduction is related to gas supplies being cut off to a number of countries and a decrease in supplies via Nord Stream in the second half of June. If the current structure of supplies is maintained, imports of Russian pipeline gas to the EU could fall 45% in 2022 to less than 80 bcm, with Russian gas accounting for only 25% of imports, the lowest level for over 20 years, it said.

"The phase-out of Russian gas from the EU market is expected to intensify Russia's efforts to reconfigure its gas and LNG exports toward Asia. Our analysis indicates that in a best-case scenario for Russia, it would take at least a decade to ramp up its gas supplies to Asian markets to a level close to its 2021 exports to the European Union (155 bcm). It would also necessitate the development of new gas export infrastructure and require significant capital investment at a time when Russia's access to capital markets and energy technologies is restricted by the various sanction regimes," the report said.