Russian Gas Pipeline Exports to Europe Close to 40 Year Lows: EIA

Russian pipeline gas exports to the European Union (EU) and the United Kingdom (UK) dropped by nearly 40 percent during the first seven months of 2022 compared to the same period last year, according to an Aug. 9 report from the U.S. Energy Information Administration based on data from Refinitiv Eikon. The key driver of lower Russian gas exports into the EU and UK has been the Russian invasion of Ukraine.

Russian volumes during this period are 50 percent below the previous five year average (2017-21) and have led to a structural shift in the market and the possibility of zero Russian gas supply in the coming years. Accordingly, gas prices in the EU and UK are now trading at unprecedented highs.

Russian gas enters the EU predominantly via the Nord Stream 1 pipeline in Germany. The pipeline, as of the last week of July, has been flowing at 20 percent capacity, due to technical issues with their turbines. Moreover, the Nord Stream 1 pipeline was undergoing annual maintenance from July 11 until July 21, which also impacted exports to the European market.

Gas supply through the Nord Stream 1 pipeline has been used as a political tool by the Russian’s, according to politicians in the EU. Earlier in July, the pipeline was flowing at 40 percent of its capacity and at that point, the Russians had stated that another turbine was under maintenance, whilst Germany reported that the reduction is politically motivated.

Natural gas pipeline exports from Russia to the EU and the UK have been falling since 2020, initially because of lower demand in Europe due to the COVID-19 pandemic. In order for the EU and UK to compensate for lower Russian exports, they have been importing larger volumes of liquefied natural gas. The U.S. has been a large exporter of LNG to the UK and EU due to the price profitability in the UK and European market. Spot gas prices in the UK and EU and provided a price incentive to LNG cargoes and diverted cargoes away from Asia.