BAKU, Azerbaijan, April 16. Eurasia’s gas supply is expected to decline by close to 5 percent in 2022, representing a strong downward revision from the 1 percent y-o-y increase in the Q1 2022 forecast, Trend reports with reference to the International Energy Agency (IEA).
IEA notes that the war in Ukraine and the consequent sanctions on Russia are set to lead to a sharp decline in economic activity in both Ukraine and Russia, weighing on gas demand in the industrial and power sectors.
“The assumed return to average weather conditions during 2022 is set to weigh on gas demand in the power and heat sectors, compared to the cold and long heating seasons of 2021. Russia’s net pipeline exports to Europe are foreseen to fall by 17 percent based on booked capacities, while Central Asian pipeline deliveries to China are set to rise to over 45 bcm. Russian exports via the Power of Siberia pipeline are set to ramp up to 15 bcm, while Azeri flows to Europe via the TAP are expected to reach 10 bcm. Russia’s LNG exports are foreseen to increase by 5 percent on the commissioning of Portavaya LNG,” reads the report.
The agency estimates that following a strong increase in the first nine months of 2021 (up by 12 percent y-o-y), Eurasia’s gas production growth slowed to an estimated 3.5 percent y-o-y during the 2021/22 heating season. This was driven both by slower domestic demand growth and a decline in extra-regional exports to Europe.
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