Russian natural gas industry - statistics & facts
Natural gas is one of the commodities most affected by the Russian invasion of Ukraine. Russia's second-major source of fossil fuel revenue after oil, it had an export value of over 145 billion euros between February 24, 2022, and June 18, 2024. Russia is the second-largest natural gas producer in the world, with most reserves located in West Siberia and the Volga-Ural provinces. Furthermore, the country ranks second among gas exporters, primarily via pipelines.
As global gas prices sharply increased after the start of the war in Ukraine, Gazprom, Russia's largest gas producer and the only company exporting pipeline gas, reported its highest revenue in 2022, with China and Turkey being the leading export destinations. However, in 2023, Gazprom reported a net loss for the first time in the 2000s due to a decline in demand from Europe.
Even though several Western nations reduced or completely suspended imports of Russian natural gas via pipelines, Russia's gas export revenue was not largely impacted by the Western sanctions in 2022 due to increased gas prices. However, the industry saw the negative impact of the restrictions reflected in Gazprom's net loss in 2023 and the decrease in production. The ban on LNG transshipment via EU countries might further decrease the industry's earnings; at the same time, the planned LNG initiatives could expand Russia's LNG export capacity and thus enable higher exports.
Russian gas exports during the war in Ukraine
The U.S. completely banned energy imports from Russia, while European countries pledged to reduce their reliance on Russian gas by diversifying imports, saving energy, and using more renewables. In its 14th sanctions package, the European Union (EU) prohibited transshipment of Russian liquefied natural gas (LNG) via EU members into third countries; however, several EU countries continue to purchase pipeline gas and LNG from Russia. Moreover, the share of Russian gas in extra-EU imports increased in the first three months of 2024 relative to the previous quarter, which could be explained by lower prices. While Ukraine still transits Russian gas to European countries, it stopped operating one of the transit points, Sokhranivka, due to safety reasons.As global gas prices sharply increased after the start of the war in Ukraine, Gazprom, Russia's largest gas producer and the only company exporting pipeline gas, reported its highest revenue in 2022, with China and Turkey being the leading export destinations. However, in 2023, Gazprom reported a net loss for the first time in the 2000s due to a decline in demand from Europe.
LNG prospects in Russia
In 2022, Russia exported over 40 billion cubic meters of LNG, ranking fourth after Qatar, Australia, and the U.S. The exports sharply increased between 2018 and 2020, while the 2022 shipments grew only slightly. The leading importers of Russian LNG by volume are China, Japan, and Spain. Novatek's Yamal LNG and Gazprom's Sakhalin-II are Russia's largest LNG projects up to date, while more projects are being planned, including Arctic LNG 2 and Baltic LNG.Even though several Western nations reduced or completely suspended imports of Russian natural gas via pipelines, Russia's gas export revenue was not largely impacted by the Western sanctions in 2022 due to increased gas prices. However, the industry saw the negative impact of the restrictions reflected in Gazprom's net loss in 2023 and the decrease in production. The ban on LNG transshipment via EU countries might further decrease the industry's earnings; at the same time, the planned LNG initiatives could expand Russia's LNG export capacity and thus enable higher exports.
